This paper advances the specification and estimation of econometric models of retirement and saving in two earner families. The complications introduced by the interaction of retirement decisions by husbands and wives have led researchers to adopt a number of simplifications. Our analysis relaxes these restrictions. The model includes three labor market states, full-time work, partial retirement, and full retirement; reverse flows from states of lesser to greater work; an extended choice set created when spouses make independent retirement decisions; heterogeneity in time preference; varying taste parameters for full-time and part-time work; and the possibility of changes in preferences after retirement.
This paper was supported by a grant from the National Institute on Aging, 5 R01 AG024337, through the National Bureau of Economic Research. All opinions and views expressed herein are those of the authors and do not necessarily reflect the views or opinions of either the National Bureau of Economic Research or of the National Institute on Aging.
Gustman, A.L. and Steinmeier, T.L. (2014), "Integrating Retirement Models: Understanding Household Retirement Decisions", Factors Affecting Worker Well-being: The Impact of Change in the Labor Market (Research in Labor Economics, Vol. 40), Emerald Group Publishing Limited, Bingley, pp. 79-112. https://doi.org/10.1108/S0147-912120140000040003
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