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Old European Couples' Retirement Decisions: the Role of Love and Money

Author

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  • Pozzoli, Dario

    (Department of Economics, Aarhus School of Business)

  • Ranzani, Marco

    (Universita' Cattolica)

Abstract

This study investigates old European couples' retirement choices in order to bridge the gap between the European and the American literature. The typical European family approaching retirement is a dual-earner family: the dataset used in this paper reveals that 78 percent of working males is married, and amongst these 24 percent has a working wife. This results from dramatic changes in the labor force behaviour of both older men and older women after World War II. These trends signal a need of investigating retirement choices at a household level. Using an absolutely new international micro data (SHARE, Survey of Health, Ageing and Retirement in Europe - Release 2), we adopt a duration analysis approach and estimate both single and competing risks models by allowing for a exible speci cation with and without unobserved heterogeneity. Our ndings show that joint retirement is signi cantly correlated with education, age, and health status, together with partner's employment status, partner's education and partner's health status. We also perform a sensitivity analysis in order to check whether the results on the correlation of health status are robust to two alternative measures of health which possibly correct for subjectivity and cross-country incomparability of self-reported health. We nd that allowing for di erent exit routes and taking into account partner's characteristics is critical to fully understand joint retirement.

Suggested Citation

  • 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.
    • Handle: RePEc:hhs:aareco:2009_002
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    Citations

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    Cited by:

    1. Berangere Legendre & Annaig-C. Pedrant & Mareva Sabatier, 2018. "Should I stay or should I go? An econometric analysis of retirement decisions by couples," Applied Economics, Taylor & Francis Journals, vol. 50(53), pages 5814-5829, November.
    2. Warren, Diana A., 2015. "Retirement decisions of couples in Australia: The impact of spousal characteristics and preferences," The Journal of the Economics of Ageing, Elsevier, vol. 6(C), pages 149-162.
    3. Diana Warren, 2013. "Retirement Decisions of Couples: The Impact of Spousal Characteristics and Preferences on the Timing of Retirement," Melbourne Institute Working Paper Series wp2013n41, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

    More about this item

    Keywords

    Joint retirement; Grouped duration data; Europe;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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