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Retirement Decisions of Couples: The Impact of Spousal Characteristics and Preferences on the Timing of Retirement

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  • Diana Warren

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper provides new evidence of coordination of retirement by mature age couples in Australia. Two complementary estimation approaches are used to highlight the importance of taking the household decision-making context into account when modeling the retirement behaviour of partnered men and women. First, a single risk hazard model provides insights into the influences of a spouse’s characteristics on the retirement decision of the individual. Second, a competing-risks framework is used to examine the retirement behaviour of couples exiting from a situation in which both are in paid employment. There is strong evidence of coordination of retirement by mature age couples in Australia due to complementarities in leisure and, for women, because of caring responsibilities. In particular, the results suggest that women may delay their own retirement if their partner has a financial incentive to continue in the labour force; or retire early to care for a partner who is in poor health.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2013n41.

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Length: 33pp
Date of creation: Dec 2013
Date of revision:
Handle: RePEc:iae:iaewps:wp2013n41

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Keywords: Retirement; older workers; households; leisure; complementarity;

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References

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  1. Martin Browning, 1994. "The Saving Behaviour of a Two Person Household," Discussion Papers 96-09, University of Copenhagen. Department of Economics, revised Jan 1996.
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  3. Kanika Kapur & Jeannette Rogowski, 2007. "The Role of Health Insurance in Joint Retirement among Married Couples," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 60(3), pages 397-407, April.
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  14. Pozzoli, Dario & Ranzani, Marco, 2009. "Old European Couples' Retirement Decisions: the Role of Love and Money," Working Papers 09-2, University of Aarhus, Aarhus School of Business, Department of Economics.
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