Should I stay or should I go? An econometric analysis of retirement decisions by couples

Abstract

This paper analyzes retirement decisions from a household perspective, treating the retirement timing of spouses as potentially interdependent choices. To identify the determinants of retirement decisions by couples and the effects of spousal retirement, this research estimates bivariate probit models in a multi-country setting. The results show a significant joint retirement trend: Both men and women are more likely to retire if their spouse already has retired. Strong asymmetric behaviors arise by gender though, with high crosscountry heterogeneity, reflecting institutional differences in both pension and public health systems.

Linked lives, linked retirement? Relative income differences within couples and gendered retirement decisions in Europe

“…While career and retirement planning have traditionally indeed been more anchored in male careers (Bennett and Möhring, 2015;Engelhardt, 2012), the increasing share of dual-earner households facing retirement decisions makes the interdependencies of working life and retirement transitions within the couple more important. As women have increased their labour market participation, also the family and gender dimensions of retirement are starting to attract academic attention (Finch, 2013;Dahl et al, 2003;Danø et al, 2005;Hank, 2004;Bhatt, 2017;De Preter et al, 2015;Denaeghel et al, 2011;Gustafson, 2017;Legendre et al, 2018). The present study contributes to insights in this domain by showing that the relative contribution to the household income influences retirement timing in opposite directions for men and women, suggesting gendered expectations that play even stronger in gender traditional societies.…”

“…However, as the three-way-interactions (-0.004*** for men and -0.002* for women) in Table A2 indicate, this effect is again much stronger for individuals who are within reach of statutory retirement, which is in line with our observations regarding H2 above. Given the desire for joint retirement among many couples (Gustman and Steinmeier, 2000;Legendre et al, 2018), higher replacement rates seem to enable couple households with a relatively egalitarian distribution of incomes to plan their retirement according to their preferences without being financially restricted.…”

“…An increasing number of studies address the question of how (married) couples influence each other's retirement decisions. A large number of studies have analysed the phenomenon of "joint retirement" (Gustman and Steinmeier, 2000;Szinovacz, 2002; for a European comparison, see De Preter et al, 2015;Legendre et al, 2018). This synchronisation of retirement timing was found to be the result of gendered processes whereby women are more likely to adjust their retirement timing to align it with their partner's retirement (for Sweden, see Gustafson, 2017; for Switzerland, see Lalive and Parrotta, 2017).…”

El inicio del fin de una etapa: la jubilación

“…Es por ello que, si queremos tener una jubilación más positiva, debemos prepararnos para afrontarla correctamente. Paralelamente, algunos estudios (e.g., Legendre et al, 2018) demuestran que es más probable que decidamos jubilarnos cuando nuestra(o) cónyuge ya está jubilado(a); hecho que nos empujará hacia esta nueva etapa. Sin embargo, estos resultados parecen sesgados cuando apuntan únicamente a parejas que presentan una buena relación marital por ambas partes.…”

Time inconsistency and delayed retirement decision: the French pension bonus

“…Rational reasons, other than financial, are advanced in the literature to explain these behaviours. Notably, marital status is an important predictor, as spouses make decisions together rather than making optimal choice in purely individual settings (Gustman and Steinmeier, 2000;Legendre, Pedrant and Sabatier, 2018). Lack of information also seems to explain a large part of the heterogeneity in behaviours.…”