Spending time together? Effects on the retirement decision from partner’s labour market status

In this paper we study retirement decisions and more specifically, the influence of a partner’s labour market status on this decision. We use information from three waves of the Survey of Health Ageing and Retirement in Europe (SHARE), providing information on a wide range of variables, including economic, social, as well as health variables not only of the respondent but also of the partner of the respondent, if any. Most importantly, we are able analyse the transition into retirement rather than the state of being retired and also to distinguish between different degrees of labour market attachment of the partner. Initially, we find that having a partner who is retired or a homemaker increases the likelihood of retirement, whereas an unemployed partner or a partner who is not working due to permanent sickness or disability has no statistically significant effect. However, dividing the sample into men and women, we find that the effects differ substantially between these two groups. The probability of retirement among men is not influenced by their partner’s labour market status, and among women we only find a statistically significant effect of having a partner who is retired. Our findings are robust to variations in the definition of retirement and subsamples.JEL: J26, J1