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What Happens to the Husband's Retirement Decision when the Wife's Retirement Incentives Change?

  • Håkan Selin

Several studies have documented a strong correlation in the timing of spouses’ retirement decisions. However, considerably less is known about the causal impact of one spouse’s retirement incentives on the retirement decision of the other spouse. Before, but not after, 2001 broad categories of Swedish local government workers in female dominated occupations were entitled to retire with full pension benefits already at the age of 63. In this paper, I utilize this reform – together with a micro data set covering the total Swedish population – to estimate the effect of a change in the wife’s incentive on the husband’s retirement behavior. I document a sharp decrease in pension benefit withdrawals among 63 year old wives in the local government sector in the years following the reform. However, I do not find any evidence of a response among husbands. This finding is at odds with most earlier results in the literature.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3772.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_3772
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  1. Dayanand S. Manoli & Andrea Weber, 2011. "Nonparametric Evidence on the Effects of Financial Incentives on Retirement Decisions," NBER Working Papers 17320, National Bureau of Economic Research, Inc.
  2. Liebman, Jeffrey B. & Luttmer, Erzo F.P. & Seif, David G., 2009. "Labor supply responses to marginal Social Security benefits: Evidence from discontinuities," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1208-1223, December.
  3. Falkinger, Josef & Winter-Ebmer, Rudolf & Zweimüller, Josef, 1994. "Retirement of Spouses and Social Security Reform," CEPR Discussion Papers 855, C.E.P.R. Discussion Papers.
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  7. Tammy Schirle, 2008. "Why Have the Labor Force Participation Rates of Older Men Increased since the Mid-1990s?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 549-594, October.
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  9. Burtless, Gary, 1986. "Social Security, Unanticipated Benefit Increases, and the Timing of Retirement," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 781-805, October.
  10. Alan L. Gustman & Thomas L. Steinmeier, 2004. "Social security, pensions and retirement behaviour within the family," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 723-737.
  11. James H. Stock & David A. Wise, 1988. "Pensions, The Option Value of Work, and Retirement," NBER Working Papers 2686, National Bureau of Economic Research, Inc.
  12. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
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  14. Mark Y. An & Bent Jesper Christensen & Nabanita Datta Gupta, 2004. "Multivariate mixed proportional hazard modelling of the joint retirement of married couples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 687-704.
  15. Mårten Palme & Ingemar Svensson, 2004. "Income Security Programs and Retirement in Sweden," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 579-642 National Bureau of Economic Research, Inc.
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  17. repec:crr:crrwps:2003-04 is not listed on IDEAS
  18. Courtney Coile & Jonathan Gruber, 2007. "Future Social Security Entitlements and the Retirement Decision," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 234-246, May.
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