Retirement coordination and leisure complementarity

Irina Merkurieva*

*Corresponding author for this work

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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 languageEnglish
JournalLabour Economics
Volume85
Early online date2 Sept 2023
DOIs
Publication statusPublished - Dec 2023

Keywords

  • Retirement
  • Leisure complementarity
  • Intertemporal household choice

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