Impact of a Wife's Employment on her Husband's Retirement Decision: Evidence from Japanese Longitudinal Data
DP Number DP2017-006
Date December, 2017
Author Tadashi Sakai, Akihito Toda, Atsuhiro Yamada
JEL Classification codes J14; J22; J26
Keywords Retirement; Middle-aged person; Interdependence
Based on a large longitudinal data set on Japanese middle-aged and older individuals, this study investigates whether women’s labor force participation affects their husbands’ retirement decisions. Employing a simple fixed-effects model, we found a significant positive effect of wives’ labor force participation on husbands’ retirement decisions, which seems to imply that a husband’s leisure is complementary to that of his wife. However, when employing the instrumental variable fixed-effects model, which assumes joint decision-making by the husband and wife, we found no significant effect of the wife’s employment on her husband’s retirement decision, regardless of employment type.