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Labor Force Transitions of Older Married Couples in Germany

Author Info

  • Blau, David M.

    ()

    (Ohio State University)

  • Riphahn, Regina T.

    ()

    (University of Erlangen-Nuremberg)

Abstract

This study investigates the labor force behavior of older married couples in Germany. Monthly observations from the first eleven waves of the German Socio-Economic Panel (GSOEP) are used to describe and analyze the relationship between the labor force behavior of husbands and wives. The empirical model is a discrete time, competing risks hazard model of transitions among labor force states defined by the employment status of both spouses. The analysis indicates that the probability of one spouse exiting employment is much larger if the other spouse is not employed than if the other spouse is employed. Similarly, one member of a couple is much more likely to enter employment if the spouse is employed than if the spouse is not employed. Observed covariates including wages and retirement benefits help to explain these patterns, but unobserved preferences for shared leisure also appear to play an important role.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5.

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Length: 45 pages
Date of creation: May 1998
Date of revision:
Publication status: published in: Labour Economics, 1999, 6 (2), 229-251; see IZA Reprints 22/99
Handle: RePEc:iza:izadps:dp5
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Keywords: competing risks hazard model; household decision-making; retirement; labor force transition;

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Find related papers by JEL classification:
  • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
  • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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  1. Michael D. Hurd, 1988. "The Joint Retirement Decision of Husbands and Wives," NBER Working Papers 2803, National Bureau of Economic Research, Inc.
  2. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
  3. Donna B. Gilleskie & David M. Blau, 2006. "Health insurance and retirement of married couples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 935-953.
  4. Axel Borsch-Supan & Reinhold Schnabel, 1997. "Social Security and Retirement in Germany," NBER Working Papers 6153, National Bureau of Economic Research, Inc.
  5. 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.
  6. Blau, David M., 1997. "Social security and the labor supply of older married couples," Labour Economics, Elsevier, vol. 4(4), pages 373-418, December.
  7. Kooreman, P. & Kapteyn, A.J., 1989. "On the empirical implementation of some game theoretic models of household labor supply," Discussion Paper 1989-56, Tilburg University, Center for Economic Research.
  8. repec:ner:tilbur:urn:nbn:nl:ui:12-364364 is not listed on IDEAS
  9. John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998. "The Dynamic Effects of Health on the Labor Force Transitions of Older Workers," NBER Working Papers 6777, National Bureau of Economic Research, Inc.
  10. Zweimuller, Josef & Winter-Ebmer, Rudolf & Falkinger, Josef, 1996. "Retirement of spouses and social security reform," European Economic Review, Elsevier, vol. 40(2), pages 449-472, February.
  11. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-67, June.
  12. Kooreman, P. & Kapteyn, A.J., 1990. "On the empirical implementation of some game theoretic models of household labor supply," Other publications TiSEM 4c9bb2ae-f1e6-4924-8cae-3, School of Economics and Management.
  13. Peracchi, Franco & Welch, Finis, 1994. "Trends in Labor Force Transitions of Older Men and Women," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 210-42, April.
  14. Alan L. Gustman & Thomas L. Steinmeier, 1983. "A Structural Retirement Model," NBER Working Papers 1237, National Bureau of Economic Research, Inc.
  15. 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.
  16. Marjorie B. McElroy, 1990. "The Empirical Content of Nash-Bargained Household Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 559-583.
  17. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
  18. John Rust & Christopher Phelan, 1994. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Public Economics 9406005, EconWPA, revised 06 Jul 1994.
  19. Alan L. Gustman & Thomas L. Steinmeier, 1994. "Retirement in a Family Context: A Structural Model for Husbands and Wives," NBER Working Papers 4629, National Bureau of Economic Research, Inc.
  20. Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc.
  21. McElroy, Marjorie B & Horney, Mary Jean, 1981. "Nash-Bargained Household Decisions: Toward a Generalization of the Theory of Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 333-49, June.
  22. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
  23. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  24. Gianna Claudia Giannelli, 1996. "Women`s transitions in the labour market: A competing risks analysis on German panel data," Journal of Population Economics, Springer, vol. 9(3), pages 287-300.
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