Wednesday, 16. March 2016 in Publications
Retirement policies are individually designed but the majority of older people live as couples. We estimate the effects of a French pension reform on spouses’ employment decisions. We use labor-force survey data, pooled over different years, on fifty thousand French couples and apply a regression discontinuity framework, also controlling for couple’s unobserved heterogeneity. We conclude that the reform immediately reduced both spouses’ retirement probability but also increased the probability of being unemployed for the husband and a “housewife” for the wife. The wife’s retirement probability also drops by 1 to 4 percentage points if the husband is hit by the reform, and vice-versa. Instrumenting spousal retirement with legal retirement age, own retirement probability rises by 2 to 5 percentage points upon spousal retirement. We conclude that social security laws may actually impede spouses (who are often apart in age) to retire together.