Spousal retirement and hours outcomes

Increasing individual working lives to counter population ageing and public pension deficits is of utmost interest to policy makers today. Because over 70 per cent of older individuals live in a couple,it is relevant to investigate spouses’ retirement strategies. Earlier literature in this area focused on spousal participation decision. Here we exploit the law on retirement age in France to identify theeffect of a spouse’s retirement on the other spouse’s labor supply, accounting for both participation and hours responses. The sample for the analysis includes over 85 000 French couples with both spouses aged 50 to 70 years. We find that the husband’s retirement probability increase significantly, though slightly, by about 0.02, upon retirement of the wife but the wife’s retirement does not respondto the husband’s retirement. Own hours of market work drop significantly and roughly by less than two hours per week upon spousal retirement.