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Retirement Incentives And Couples' Retirement Decisions

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Author Info
Courtney Coile () (Center for Retirement Research)
Abstract

The typical family in the US is now a dual-earner couple, yet there are relatively few studies that examine the retirement decision in a household context. This paper explores how husbandsí and wivesí retirement behavior is influenced by their own financial incentives from Social Security and private pensions and by ìspillover effectsî from their spousesí incentives. Spillover effects are possible due to income effects and complementarity of leisure; if significant, their omission will bias estimates of the effect of changing Social Security policy on retirement. I find that men and women are similarly responsive to their own incentives: an increase of $1,000 in the return to additional work is associated with a reduction of 0.9% of baseline retirement for men and 1.3% of baseline retirement for women. I find that men are very responsive to their wivesí financial incentives but that women are not responsive to their husbandsí incentives and present evidence to suggest that this may be due to asymmetric complementarities of leisure. Policy simulations indicate that estimates of the effect of a policy change on the probability of men working at age 65 are biased by 13% to 20% if spillover effects are omitted.

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Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number 2003-04.

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Date of creation: 28 Mar 2003
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Handle: RePEc:crr:crrwps:2003-04

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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.:
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  2. Andrew A. Samwick, 1998. "New Evidence on Pensions, Social Security, and the Timing of Retirement," NBER Working Papers 6534, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Burtless, Gary, 1986. "Social Security, Unanticipated Benefit Increases, and the Timing of Retirement," Review of Economic Studies, Blackwell Publishing, vol. 53(5), pages 781-805, October. [Downloadable!] (restricted)
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  5. Haider, S. & Solon, G., 2000. "Nonrandom Selection in the HRS Social Security Earnings Sample," Papers 00-01, RAND - Labor and Population Program.
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  6. Coile, Courtney & Diamond, Peter & Gruber, Jonathan & Jousten, Alain, 2002. "Delays in claiming social security benefits," Journal of Public Economics, Elsevier, vol. 84(3), pages 357-385, June. [Downloadable!] (restricted)
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  7. Alan L. Gustman & Thomas L. Steinmeier, 2002. "Social Security, Pensions and Retirement Behavior Within the Family," NBER Working Papers 8772, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Boskin, Michael J. & Hurd, Michael D., 1978. "The effect of social security on early retirement," Journal of Public Economics, Elsevier, vol. 10(3), pages 361-377, December. [Downloadable!] (restricted)
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  9. Alan L. Gustman & Thomas L. Steinmeier, 2002. "The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth," Working Papers wp029, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  10. Blau, David M, 1998. "Labor Force Dynamics of Older Married Couples," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 595-629, July. [Downloadable!] (restricted)
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  13. Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Joseph F. Quinn, 1999. "Has the Early Retirement Trend Reversed?," Boston College Working Papers in Economics 424, Boston College Department of Economics. [Downloadable!]
  15. Courtney Coile & Jonathan Gruber, 2000. "Social Security Incentives for Retirement," NBER Working Papers 7651, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Alan L. Gustman & Thomas L. Steinmeier, 2002. "The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth," NBER Working Papers 9183, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. James H. Stock & David A. Wise, 1990. "The Pension Inducement to Retire: An Option Value Analysis," NBER Chapters, in: Issues in the Economics of Aging, pages 205-230 National Bureau of Economic Research, Inc. [Downloadable!]
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  18. Gary S. Fields & Olivia S. Mitchell, 1982. "Economic Determinants of the Optimal Retirement Age: An Empirical Investigation," NBER Working Papers 0876, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  19. Jerry A. Hausman & David A. Wise, 1985. "Social Security, Health Status, and Retirement," NBER Chapters, in: Pensions, Labor, and Individual Choice, pages 159-192 National Bureau of Economic Research, Inc. [Downloadable!]
  20. Ruhm, Christopher J, 1990. "Bridge Jobs and Partial Retirement," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 482-501, October. [Downloadable!] (restricted)
  21. Krueger, Alan B & Pischke, Jorn-Steffen, 1992. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 412-37, October. [Downloadable!] (restricted)
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  22. Pozzebon, Silvana & Mitchell, Olivia S, 1989. "Married Women's Retirement Behavior," Journal of Population Economics, Springer, vol. 2(1), pages 39-53.
    Other versions:
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(explanations, 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.)

  1. Michaud, P.C. & Vermeulen, F.M.P., 2004. "A collective retirement model : identification and estimation in the presence of externalities," Discussion Paper 75, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  2. Michaud, P.C., 2003. "Joint labour supply dynamics of older couples," Discussion Paper 69, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  3. Kanika Kapur & Jeannette Rogowski, 2006. "Love or Money? Health Insurance and Retirement Among Married Couples," NBER Working Papers 12273, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Alicia H. Munnell & Natalia Zhivan, 2006. "Earnings and Women’s Retirement Security," Working Papers, Center for Retirement Research at Boston College wp2006-12, Center for Retirement Research, revised Jun 2006. [Downloadable!]
  5. Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics. [Downloadable!]
  6. Courtney Coile, 2003. "Health Shocks And Couples' Labor Supply Decisions," Working Papers, Center for Retirement Research at Boston College 2003-08, Center for Retirement Research. [Downloadable!]
  7. Alicia H. Munnell & Kevin Cahill & Natalia Jivan, 2003. "How Has The Shift To 401(k)s Affected The Retirement Age?," Issues in Brief ib_13, Center for Retirement Research. [Downloadable!]
    Other versions:
  8. Estelle James & Alejandra Cox Edwards, 2005. "Do Individual Accounts Postpone Retirement: Evidence from Chile," Working Papers wp098, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  9. Zhiyang Jia, 2005. "Spousal Influence on Early Retirement Behavior," Discussion Papers 406, Research Department of Statistics Norway. [Downloadable!]
  10. Zhiyang Jia, 2005. "Retirement Behavior of Working Couples in Norway. A Dynamic Programming Approach," Discussion Papers 405, Research Department of Statistics Norway. [Downloadable!]
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