The Effect of Incentive‐Induced Retirement on Spousal Retirement Rates: Evidence from a Natural Experiment

21 Pages Posted: 27 Feb 2019

See all articles by Hans Bloemen

Hans Bloemen

VU University Amsterdam; IZA Institute of Labor Economics; Tinbergen Institute; Netspar

Stefan Hochguertel

VU University Amsterdam; Tinbergen Institute

Jochem Zweerink

Utrecht University

Date Written: April 2019

Abstract

We identify, quantify, and explain the impact of incentive‐induced early retirement (ER) of husbands on their wives' probability to retire within 1 year, using administrative data from the Netherlands. Our identification strategy is based on a policy intervention by which targeted individuals working at the central government level became unexpectedly and temporarily eligible for very generous ER benefits. This retirement window of opportunity implied for interested workers that transitions from the current job into full retirement had to be effected swiftly and irreversibly. We find that induced ER of husbands increased their wives' probability to retire by 10 percentage points. This is a strong and robust local average treatment effect. Partly, the effect runs through wives at ages when they may have been eligible for ER programs themselves.

JEL Classification: C26, J26, J120, J140

Suggested Citation

Bloemen, Hans and Hochguertel, Stefan and Zweerink, Jochem, The Effect of Incentive‐Induced Retirement on Spousal Retirement Rates: Evidence from a Natural Experiment (April 2019). Economic Inquiry, Vol. 57, Issue 2, pp. 910-930, 2019, Available at SSRN: https://ssrn.com/abstract=3342655 or http://dx.doi.org/10.1111/ecin.12747

Hans Bloemen (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Stefan Hochguertel

VU University Amsterdam ( email )

Dept Econ (FEWEB)
De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 59 86033 (Phone)
+31 20 59 89870 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Jochem Zweerink

Utrecht University ( email )

Kriekenpitplein 21-22
Utrecht, Utrecht 3584 EC
Netherlands

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