Retirement coordination and leisure complementarity

Irina Merkurieva

doi:10.1016/j.labeco.2023.102431

Retirement coordination and leisure complementarity

Irina Merkurieva^*

^*Corresponding author for this work

Economics (Business School)

Research output: Contribution to journal › Article › peer-review

Abstract

Empirical evidence suggests that in a large fraction of working couples spouses retire within a short period of time. This retirement coordination is frequently attributed to leisure complementarities. Contrary to this view, I find strong substitutability between the leisure of the two household members. Using a dynamic programming model of optimal retirement and labor supply decisions, I further show that high levels of retirement coordination can be observed even in the absence of leisure complementarity. Retirement coordination is higher in the households with more equality in the earnings profiles and utility derived from the leisure of their individual members.

Original language	English
Journal	Labour Economics
Volume	85
Early online date	2 Sept 2023
DOIs	https://doi.org/10.1016/j.labeco.2023.102431
Publication status	Published - Dec 2023

Keywords

Retirement
Leisure complementarity
Intertemporal household choice

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10.1016/j.labeco.2023.102431Licence: CC BY-NC

Merkurieva_2023_LE_Retirement-coordination_CC
Copyright © 2023 The Author(s). Published by Elsevier B.V. This is an open access article undert he CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
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title = "Retirement coordination and leisure complementarity",

abstract = "Empirical evidence suggests that in a large fraction of working couples spouses retire within a short period of time. This retirement coordination is frequently attributed to leisure complementarities. Contrary to this view, I find strong substitutability between the leisure of the two household members. Using a dynamic programming model of optimal retirement and labor supply decisions, I further show that high levels of retirement coordination can be observed even in the absence of leisure complementarity. Retirement coordination is higher in the households with more equality in the earnings profiles and utility derived from the leisure of their individual members.",

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N2 - Empirical evidence suggests that in a large fraction of working couples spouses retire within a short period of time. This retirement coordination is frequently attributed to leisure complementarities. Contrary to this view, I find strong substitutability between the leisure of the two household members. Using a dynamic programming model of optimal retirement and labor supply decisions, I further show that high levels of retirement coordination can be observed even in the absence of leisure complementarity. Retirement coordination is higher in the households with more equality in the earnings profiles and utility derived from the leisure of their individual members.

AB - Empirical evidence suggests that in a large fraction of working couples spouses retire within a short period of time. This retirement coordination is frequently attributed to leisure complementarities. Contrary to this view, I find strong substitutability between the leisure of the two household members. Using a dynamic programming model of optimal retirement and labor supply decisions, I further show that high levels of retirement coordination can be observed even in the absence of leisure complementarity. Retirement coordination is higher in the households with more equality in the earnings profiles and utility derived from the leisure of their individual members.

KW - Retirement

KW - Leisure complementarity

KW - Intertemporal household choice

U2 - 10.1016/j.labeco.2023.102431

DO - 10.1016/j.labeco.2023.102431

M3 - Article

VL - 85

JO - Labour Economics

JF - Labour Economics

ER -

Retirement coordination and leisure complementarity

Abstract

Keywords

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