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The Retirement Behavior of Married Couples: Evidence from the Spouse's Allowance

  • Michael Baker

I examine the effects of the introduction of the Spouse's Allowance to the Canadian Income Security (IS) system on the retirement behavior of couples. This program was effectively targeted at females in couples attempting to live on a single pension. It allowed qualifying spouses to receive the age related benefits of the IS system at age 60, up to five years earlier than other members of the population. This policy intervention provides an excellent opportunity to investigate how income security programs affect the timing of retirement, and how programs targeted at one spouse can affect the behavior of the other. The results indicate that the introduction of the Allowance is associated with a relative increase in the labor force rates of 6 to 7 percentage points among males in eligible couples. Eligible females did not share the rising employment rates over the 1970s experienced by their counterparts (of the same age) who were not eligible for the Spouse's Allowance.

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File URL: http://www.nber.org/papers/w7138.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7138.

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Date of creation: May 1999
Date of revision:
Publication status: published as "The Retirement Behavior of Married Couples: Evidence fromthe Spouse's Allowance", Journal of Human Resources, Vol. 37, Winter 2002, 1-34.
Handle: RePEc:nbr:nberwo:7138
Note: AG PE
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Web page: http://www.nber.org
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  1. Silvana Pozzebon & Olivia S. Mitchell, 1986. "Married Women's Retirement Behavior," NBER Working Papers 2104, National Bureau of Economic Research, Inc.
  2. Blau, David M., 1997. "Social security and the labor supply of older married couples," Labour Economics, Elsevier, vol. 4(4), pages 373-418, December.
  3. Jonathan Gruber, 1997. "Social Security and Retirement in Canada," NBER Working Papers 6308, National Bureau of Economic Research, Inc.
  4. 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.
  5. Baker, Michael & Benjamin, Dwayne, 1999. "How do retirement tests affect the labour supply of older men?," Journal of Public Economics, Elsevier, vol. 71(1), pages 27-51, January.
  6. Baker, Michael & Benjamin, Dwayne, 1999. "Early Retirement Provisions and the Labor Force Behavior of Older Men: Evidence from Canada," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 724-56, October.
  7. Michael D. Hurd, 1988. "The Joint Retirement Decision of Husbands and Wives," NBER Working Papers 2803, National Bureau of Economic Research, Inc.
  8. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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