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Retiring Together or Working Alone: The Impact of Spousal Employment and Disability on Retirement Decisions

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by Richard W. Johnson and Melissa Favreault

WP#2001-1  

Abstract

Husbands and wives often coordinate retirement decisions, as many married workers withdraw from the labor force at about the same time as their spouses. However, joint retirement behavior may differ for couples in which one spouse retires with health problems. In those cases, the able-bodied spouse may delay retirement to compensate for the earnings lost by the disabled spouse. This paper examines the retirement decisions of husbands and wives and how they interact with spousal health and employment, using data from the 1992-1998 waves of the Health and Retirement Study. The results indicate that both men and women are more likely to retire if their spouses have already retired than if they are still working. However, they are less likely to retire if their spouses appear to have left the labor force because of health problems, especially when spouses are not yet eligible for Social Security retirement benefits. There is no evidence that spousal caregiving demands affect retirement rates.

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Richard W. Johnson is a Senior Research Associate at The Urban Institute. Melissa M. Favreault is a Research Associate at The Urban Institute. The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement Research Consortium. The opinions and conclusions are solely those of the authors and should not be construed as representing the opinions or policy of SSA or any agency of the Federal Government or of the Center for Retirement Research at Boston College. The views expressed here also do not necessarily represent the opinions of The Urban Institute, its board, or its sponsors. Earlier versions of this paper were presented at the annual meeting of the Population Association of America in March 2000 and at the second annual conference of the Social Security Retirement Research Consortium in May 2000. The authors are grateful to Angela O’Rand, Cori Uccello and Sheila Zedlewski for helpful comments.
Tags: Work and Retirement, Working Papers,
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