Scandinavian Working Papers in Economics

Working Papers,
University of Aarhus, Aarhus School of Business, Department of Economics

No 09-2: Old European Couples' Retirement Decisions: the Role of Love and Money

Dario Pozzoli () and Marco Ranzani ()
Additional contact information
Dario Pozzoli: Department of Economics, Aarhus School of Business, Postal: Frichshuset Hermodsvej 22, 8230 Åbyhøj , Denmark
Marco Ranzani: Universita' Cattolica, Postal: Universita' Cattolica del Sacro Cuore, Largo Gemelli, 1, 20123 Milano, Italy

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.

Keywords: Joint retirement; Grouped duration data; Europe

JEL-codes: C41; J26; O52

62 pages, January 1, 2009

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