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The Retirement Behavior of Married Couples: Evidence From The Spouse’s Allowance

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  • Michael Baker

Abstract

I examine the effects of the introduction of the Spouse’s Allowance to the Canadian Income Security system on the retirement behavior of couples. This policy intervention provides an excellent opportunity to investigate how income security programs affect the timing of retirement. The structure of the Allowance also provides a view of how programs targeted at one spouse can affect the behavior of the other. Finally, conditional of the types of data available for this time period, the analysis considers the joint labor market decisions of couples. The results indicate that the introduction of the Allowance is associated with decreased employment rates and increased not in the labor force rates among eligible males. Eligible females did not share the rising employment rates over the 1970s experienced by their counterparts who were not eligible for the Spouse’s Allowance.

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Paper provided by California Davis - Department of Economics in its series Department of Economics with number 99-03.

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Handle: RePEc:fth:caldec:99-03

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Postal: University of California Davis - Department of Economics. One Shields Ave., California 95616-8578
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Web page: http://www.econ.ucdavis.edu/
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  1. Silvana Pozzebon & Olivia S. Mitchell, 1986. "Married Women's Retirement Behavior," NBER Working Papers 2104, National Bureau of Economic Research, Inc.
  2. Jonathan Gruber, 1999. "Social Security and Retirement in Canada," NBER Chapters, in: Social Security and Retirement around the World, pages 73-99 National Bureau of Economic Research, Inc.
  3. Michael D. Hurd, 1988. "The Joint Retirement Decision of Husbands and Wives," NBER Working Papers 2803, National Bureau of Economic Research, Inc.
  4. Baker, Michael & Benjamin, Dwayne, 1999. "Early Retirement Provisions and the Labor Force Behavior of Older Men: Evidence from Canada," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 724-56, October.
  5. Blau, David M., 1997. "Social security and the labor supply of older married couples," Labour Economics, Elsevier, vol. 4(4), pages 373-418, December.
  6. 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.
  7. Baker, Michael & Benjamin, Dwayne, 1999. "How do retirement tests affect the labour supply of older men?," Journal of Public Economics, Elsevier, vol. 71(1), pages 27-51, January.
  8. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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