Retirement of spouses and social security reform

Abstract

The retirement decisions of spouses may be interdependent for various reasons: similarity of tastes, joint assets, sharing rules for income and housework, or complementarity of leisure. Because of data limitations, only a few empirical studies exist on this topic. From a policy point of view, the understanding of interdependent retirement decisions should become important if legislators in different European countries are forced to synchronise minimum retirement ages for men and women which are lower now for females in a number of countries. We study the possibility of interdependent retirement using Austrian data. The findings show an asymmetry: husbands react to changes in wives' legal minimum retirement age, wives don't react vice versa. The cross-effect on men's participation rates — resulting from a rise in women's minimum retirement age — is almost half as large as the direct effect upon the women themselves.