Health Status and Retirement Decisions for Older European Couples

In this paper we use data from the European Community Household Panel (ECHP) to describe and analyse the dynamics of joint labour force behaviour of older couples for the EU12 countries. We focus on three main issues: the relevance of joint retirement across EU12 countries, the existence of complementarities in leisure and/or assortative matting and the effects of health variables. Concerning the evidence, we first find that a working spouse is more likely to retire the more recently the other spouse has retired; this effect is stronger if the wife is the working spouse. Second, there is evidence of assortative mating and/or complementarities in leisure; the effects of all relevant factors on the retirement decision of one spouse depend strongly on whether the other one is working, unemployed, or retired. Third, besides the standard evidence that poor health increases the retirement probability, we find that the husband's health affects the couple's retirement decisions much more strongly than the wife's health does. Additional asymmetric effects are detected with respect to income related variables