Retirement Decisions of Married Couples

Chemi Gotlibovski and Yoram Weiss

No 275710, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

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.

Keywords: Consumer/Household Economics; Financial Economics (search for similar items in EconPapers)
Pages: 47
Date: 2008-08
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275710

DOI: 10.22004/ag.econ.275710

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