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The Effect Of Incentive‐Induced Retirement On Spousal Retirement Rates: Evidence From A Natural Experiment

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Listed:
  • Hans Bloemen
  • Stefan Hochguertel
  • Jochem Zweerink

Abstract

We identify, quantify, and explain the impact of incentive‐induced early retirement (ER) of husbands on their wives' probability to retire within 1 year, using administrative data from the Netherlands. Our identification strategy is based on a policy intervention by which targeted individuals working at the central government level became unexpectedly and temporarily eligible for very generous ER benefits. This retirement window of opportunity implied for interested workers that transitions from the current job into full retirement had to be effected swiftly and irreversibly. We find that induced ER of husbands increased their wives' probability to retire by 10 percentage points. This is a strong and robust local average treatment effect. Partly, the effect runs through wives at ages when they may have been eligible for ER programs themselves. (JEL C26, J26, J120, J140)

Suggested Citation

  • Hans Bloemen & Stefan Hochguertel & Jochem Zweerink, 2019. "The Effect Of Incentive‐Induced Retirement On Spousal Retirement Rates: Evidence From A Natural Experiment," Economic Inquiry, Western Economic Association International, vol. 57(2), pages 910-930, April.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:2:p:910-930
    DOI: 10.1111/ecin.12747
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    References listed on IDEAS

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    1. David A. Wise, 1992. "Introduction to "Topics in the Economics of Aging"," NBER Chapters, in: Topics in the Economics of Aging, pages 1-19, National Bureau of Economic Research, Inc.
    2. Michael D. Hurd, 1990. "The Joint Retirement Decision of Husbands and Wives," NBER Chapters, in: Issues in the Economics of Aging, pages 231-258, National Bureau of Economic Research, Inc.
    3. David A. Wise, 1990. "Issues in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise90-1, July.
    4. David A. Wise, 1992. "Topics in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise92-1, July.
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    Cited by:

    1. Moghadam, Hamed Markazi & Puhani, Patrick & Tyrowicz, Joanna, 2023. "Pension Reforms and Couples' Labour Supply Decisions," Economics Working Paper Series 2304, University of St. Gallen, School of Economics and Political Science.
    2. Julian Vedeler Johnsen & Kjell Vaage & Alexander Willén, 2022. "Interactions in Public Policies: Spousal Responses and Program Spillovers of Welfare Reforms," The Economic Journal, Royal Economic Society, vol. 132(642), pages 834-864.
    3. García-Miralles, Esteban & Leganza, Jonathan M., 2024. "Joint retirement of couples: Evidence from discontinuities in Denmark," Journal of Public Economics, Elsevier, vol. 230(C).
    4. Mattia Filomena & Matteo Picchio, 2023. "Retirement and health outcomes in a meta‐analytical framework," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1120-1155, September.
    5. Matteo Picchio & Jan C. van Ours, 2020. "Mental Health Effects of Retirement," De Economist, Springer, vol. 168(3), pages 419-452, September.
    6. Francesca Carta & Marta De Philippis, 2021. "Working horizon and labour supply: the effect of raising the full retirement age on middle-aged individuals," Temi di discussione (Economic working papers) 1314, Bank of Italy, Economic Research and International Relations Area.
    7. De Brouwer, Octave & Tojerow, Ilan, 2022. "Old-Age Unemployment and Labor Supply: An Application to Belgium," IZA Discussion Papers 15628, Institute of Labor Economics (IZA).
    8. Jan C. van Ours, 2022. "How Retirement Affects Mental Health, Cognitive Skills and Mortality; An Overview of Recent Empirical Evidence," De Economist, Springer, vol. 170(3), pages 375-400, August.

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    More about this item

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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