Joint Retirement of Couples: Evidence from Discontinuities in Denmark

Abstract

We study how social security influences the retirement behavior of couples. First, we exploit over two decades of full-population data and a discontinuity design to document sizable retirement spillovers to spouses when individuals reach pension eligibility age. Next, we explore underlying mechanisms. We find age differences within couples to be a fundamental determinant of joint retirement, which is driven by older spouses working longer. Accounting for these age differences reveals a strong gender gap, which prevails after controlling for relative earnings. Finally, in a complementary analysis we show that a reform increasing eligibility ages induces similar spillovers to spouses.

Keywords: joint retirement, pension eligibility age, couples labor supply

JEL Classification: J26, H55, D10