Advanced Search
MyIDEAS: Login

Social security, pensions and retirement behaviour within the family

Contents:

Author Info

  • Alan L. Gustman

    (Department of Economics, Dartmouth College, USA)

  • Thomas L. Steinmeier

    (Department of Economics, Texas Tech University, USA)

Abstract

This paper estimates a structural model of family retirement using US data from the Health and Retirement Study (HRS). It provides further insight into household retirement decision making and the reasons for interdependence in the retirement decisions of each spouse. Improvements in HRS data and matched employer provided pension histories allow more precise identification of key parameters governing interdependent behaviour within the household. In an earlier study we found that interdependence was due to preferences rather than coordination of retirement incentives in the budget, and in particular that it is not a correlation in preferences, but the appearance of the spouse's retirement status in the husband's and wife's utility function that is largely responsible for coordination of retirement between spouses. We now find that a measure of how much each spouse values being able to spend time in retirement with the other accounts for a good portion of that apparent interdependence. For the wife, the husband's retirement status influences her retirement decision only if she values spending time in retirement with her husband. For husbands, the effect of having the wife already retired on his retirement decision is roughly doubled if he enjoys spending time in retirement with his wife, but there is some effect even if he does not. This is consistent with our earlier findings that the husband is more influenced by having a retired spouse than the wife is. The increase in the extent of the dependence of the wife's labour supply on the husband's retirement from our past work probably is traceable to better measurement of the opportunity set facing the husband in HRS data. Once estimated, we use the model to investigate the labour supply effects of alternative social security policies, examining the effect of dividing credit for earnings evenly between spouses, or of basing social security benefits on the amounts accumulated in private accounts. Both policies change the relative importance of spouse and survivor social security benefits within the household and both raise the relative reward to work later in the life cycle. The incentives created are modest, and retirement responds accordingly. Nevertheless, at some ages, such as 65, there may be as much as a 6% increase in the old age work force under privatized accounts. Copyright © 2004 John Wiley & Sons, Ltd.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1002/jae.753
File Function: Link to full text; subscription required
Download Restriction: no

File URL: http://qed.econ.queensu.ca:80/jae/2004-v19.6/
File Function: Supporting data files and programs
Download Restriction: no

Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 19 (2004)
Issue (Month): 6 ()
Pages: 723-737

as in new window
Handle: RePEc:jae:japmet:v:19:y:2004:i:6:p:723-737

Contact details of provider:
Web page: http://www.interscience.wiley.com/jpages/0883-7252/

Order Information:
Email:
Web: http://www3.interscience.wiley.com/jcatalog/subscribe.jsp?issn=0883-7252

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Eric French and John Jones, 2001. "The Effects of Health Insurance and Self-Insurance on Retirement Behavior," Computing in Economics and Finance 2001 24, Society for Computational Economics.
  2. Gale, William G, 1994. "Public Policies and Private Pension Contributions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(3), pages 710-32, August.
  3. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1990. "Efficient Windows and Labor Force Reduction," NBER Working Papers 3369, National Bureau of Economic Research, Inc.
  4. Ippolito, Richard A., 1998. "Pension Plans and Employee Performance," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226384559, March.
  5. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, vol. 59(1), pages 189-210, January.
  6. Alan L. Gustman & Thomas L. Steinmeier, 1983. "A Structural Retirement Model," NBER Working Papers 1237, National Bureau of Economic Research, Inc.
  7. David M, Blau & Donna B, Gilleskie, 2003. "Health Insurance and Retirement of Married Couples," Working Papers 2003-41, Centre de Recherche en Economie et Statistique.
  8. Gustman, Alan L. & Steinmeier, Thomas L., 2001. "How effective is redistribution under the social security benefit formula?," Journal of Public Economics, Elsevier, vol. 82(1), pages 1-28, October.
  9. Mitchell, Olivia S, 1988. "Worker Knowledge of Pension Provisions," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 21-39, January.
  10. Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914, December.
  11. Gustman, Alan L & Steinmeier, Thomas L, 2000. "Retirement in Dual-Career Families: A Structural Model," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 503-45, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:jae:japmet:v:19:y:2004:i:6:p:723-737. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.