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Spousal and survivor benefits in option value models of retirement: an application to Belgium

Author

Listed:
  • Alain Jousten

    (Université de Liège, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, CentER, Netspar, and Tilburg University - CentER, Netspar, and Tilburg University)

  • Mathieu Lefebvre

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

Abstract

We study retirement incentives with an augmented reduced form option value model à la Stock and Wise (1990). We propose methodological extensions to better reflect the respective incentives faced by singles and couples. Our results show that a more comprehensive modeling of couples' incentives leads to very different patterns of retirement incentives – particularly for women. We apply the new indicators to data from the Survey of Health, Ageing and retirement in Europe in Belgium and find two key results. First, contrary to several previous studies, we obtain a positive signed income effects. Second, we find very different retirement incentives for men and women, with little flexibility in the retirement decision for men and substantially more flexibility for women as a function of financial incentive and household composition.

Suggested Citation

  • Alain Jousten & Mathieu Lefebvre, 2019. "Spousal and survivor benefits in option value models of retirement: an application to Belgium," Post-Print hal-02180074, HAL.
    • Handle: RePEc:hal:journl:hal-02180074
    DOI: 10.1017/S1474747217000324
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    Cited by:

    1. Cetin, Sefane & Jousten, Alain, 2022. "Retirement Decision of Belgian Couples and the Impact of the Social Security System," LIDAM Discussion Papers CORE 2022024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. David Knapp & Jinkook Lee & Maciej Lis & Drystan Phillips, 2021. "Public Pension Design and Household Retirement Decisions: A Comparison of the United States and Germany," Working Papers wp417, University of Michigan, Michigan Retirement Research Center.

    More about this item

    Keywords

    Retirement; Social security; Dependent benefits;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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