Health insurance and retirement of married couples

Blau, David M.; Gilleskie, Donna B.

doi:10.1002/jae.921

“…We account for this by clustering all our 5 Extending our analysis to the case of the second spouse, we end up with a reduced form specification of her labor supply that is conceptually very similar to equation (7). 6 We find no cohabitating couples in our estimation sample.…”

Section: Data and Descriptive Analysismentioning

confidence: 70%

“…We now solve for the wife's retirement by combining equations (5) and (6). By doing so, we solve for optimal retirement consistent with the point of view of both partners.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

See 1 more Smart Citation

How does pension eligibility affect labor supply in couples?

Lalive

¹

,

Parrotta

²

2017

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S How Does Pension Eligibility Affect Labor Supply in Couples?IZA The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Many OECD countries are reforming their pension systems. We investigate how pension eligibility affects labor supply in couples. Inspired by a theoretical framework, we measure how the sharp change in the pension eligibility of both partners affects labor force participation. We find that both partners leave the labor force as they become eligible for a pension. The effect of their own pension eligibility is 12 percentage points for women and 28 percentage points for men. Women also reduce their labor force participation by 2 to 3 percentage points as their partner reaches pension eligibility. For men, the effect of their partner's eligibility is smaller and not significantly different from zero. For women and men with low education, the effect of their own eligibility is strong. Regardless of education level, the partner eligibility effect is strong in homogamous couples. Studying joint labor supply, we find that pension eligibility reduces labor supply in couples by 44 percentage points, approximately 4 percentage points more than in a model that ignores partner eligibility effects.JEL Classification: J26, J14, C40, D10

show abstract

“…I obtain an estimate of 2.9988 for ρ, the coefficient of relative risk aversion. This is above the 1.81 as found in the retirement model by Blau and Gilleskie (2006) but far below 5 as estimated in the model by French and Jones (2011). Given that the baseline employment status is full-time employment, the preferences for the other employment states, which yield more leisure, are positive.…”

Section: Resultsmentioning

confidence: 54%

The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis

Tolan

¹

2017

SSRN Journal

2

0

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in August 2017Abstract This paper develops a structural dynamic retirement model to investigate effects and corresponding underlying mechanisms of a partial retirement program on labor supply, fiscal balances, and the pension income distribution. The structural approach allows for disentangling the two counteracting mechanisms that drive the employment effects of partial retirement: 1) the crowding-out from full-time employment, and 2) the movement from early retirement or unemployment to partial retirement. It also allows for investigating the role of financial compensations in a partial retirement program. Based on a unique German administrative dataset, I perform counterfactual policy simulations that analyze the role of partial retirement combined with financial subsidies and an increased normal retirement age. The results show that partial retirement extends working lives but reduces the overall employment volume. The fiscal consequences of partial retirement are negative but substantially less so when wages and pensions in partial retirement remain uncompensated. Partial retirement decreases inequality in pension income and provides a way to smooth consumption especially for retirees in lower income deciles in the context of an increased normal retirement age.JEL: C61, J26, H55

show abstract

“…un t is a state variable = 1 if the individual ever 35 returned to work following entitlement to OASI, and = 0 otherwise. It is the basis for approximating the OASI benefit for re-entitlement following return to employment after initial entitlement (Blau and Gilleskie, 2004).…”

Section: Solution Methodsmentioning

confidence: 99%

Retirement and Consumption in a Life Cycle Model

Blau

¹

2008

Journal of Labor Economics

View full text Add to dashboard Cite

Consumption expenditure declines sharply at the time of retirement for many households, but the majority maintain a smooth consumption path. A simple life cycle model with uncertainty about the time of retirement can account for this pattern. A richer version of the model is calibrated to data from the Health and Retirement Study (HRS). The median change in consumption expenditure at retirement generated by the model is zero, while the mean is negative, matching the HRS data. However, the magnitude of the drop in consumption among households that experience a decline is too small in the model compared to the data.

show abstract

Health insurance and retirement of married couples

Cited by 149 publications

References 13 publications

How does pension eligibility affect labor supply in couples?

How does pension eligibility affect labor supply in couples?

The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis

Retirement and Consumption in a Life Cycle Model

Contact Info

Product

Resources

About