The Effects of a Retirement Age Reform on Couples' Labor Supply Decisions

40 Pages Posted: 13 Jun 2019

See all articles by Edith Sand

Edith Sand

Bank of Israel - Research Department

Shirlee Lichtman-Sadot‏

Ben-Gurion University of the Negev

Date Written: May 30, 2019

Abstract

This paper estimates the effects of a reform that deferred the retirement age in Israel on spouses' labor supply. We utilize a detailed administrative dataset to study the implications of the reform, which raised both men's and women's ages of retirement benefits concurrently, in order to estimate spouses' retirement decisions and to understand their interdependencies. We find that own retirement age deferral increases own labor supply for both genders. However, spillover effects of one spouse's retirement age deferral on the other spouse's retirement behavior differ by gender. For men, labor supply does not depend on their wife’s retirement age deferral. For women, however, postponing their husband’s retirement age increases their labor supply if their own retirement age is not increased, but does not further increase their labor supply if own retirement age is already postponed.

Keywords: Retirement Age Reform, Household Labor Supply

JEL Classification: J26, H31, H55

Suggested Citation

Sand, Edith and Lichtman-Sadot‏, Shirlee, The Effects of a Retirement Age Reform on Couples' Labor Supply Decisions (May 30, 2019). Available at SSRN: https://ssrn.com/abstract=3395663 or http://dx.doi.org/10.2139/ssrn.3395663

Edith Sand (Contact Author)

Bank of Israel - Research Department ( email )

PO Box 780
Jerusalem 91007
Israel

Shirlee Lichtman-Sadot‏

Ben-Gurion University of the Negev ( email )

Be'er Sheva
8410501
Israel

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