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Retirement Decisions of Married Couples

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  • Gotlibovski, Chemi
  • Weiss, Yoram

Abstract

In this paper we construct a simple structural dynamic model of retirement in which partners make joint retirement decisions, based on their age, current health and expected health. We estimate the model using the Israeli SHARE data. The model generates a predicted probability of retirement of each spouse for every year in which the husband age is between 55 and 75. Based on these predicted probabilities we define a synchronization index, which measures difference between the probability that both partners will be in the same state (retired or working) and the probability that they will be in a different state (one works and the other is retired). We show that couples actually synchronize their retirement decisions. We then use the model to simulate the predicted impact of the recent changes in official retirement ages of men and women in Israel on synchronization of retirement decisions.

Suggested Citation

  • Gotlibovski, Chemi & Weiss, Yoram, 2008. "Retirement Decisions of Married Couples," Foerder Institute for Economic Research Working Papers 275710, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275710
    DOI: 10.22004/ag.econ.275710
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    References listed on IDEAS

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    1. Michael D. Hurd, 1990. "The Joint Retirement Decision of Husbands and Wives," NBER Chapters, in: Issues in the Economics of Aging, pages 231-258, National Bureau of Economic Research, Inc.
    2. Coile Courtney, 2004. "Retirement Incentives and Couples' Retirement Decisions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-30, July.
    3. David A. Wise, 1990. "Issues in the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise90-1, June.
    4. Kanika Kapur & Jeannette Rogowski, 2006. "Love or Money? Health Insurance and Retirement Among Married Couples," NBER Working Papers 12273, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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