The Retirement Behavior of Married Couples: Evidence from the Spouse's Allowance

Michael Baker

NBER Working Paper No. 7138
Issued in May 1999
NBER Program(s):   AG   PE

I examine the effects of the introduction of the Spouse's Allowance to the Canadian Income Security (IS) system on the retirement behavior of couples. This program was effectively targeted at females in couples attempting to live on a single pension. It allowed qualifying spouses to receive the age related benefits of the IS system at age 60, up to five years earlier than other members of the population. This policy intervention provides an excellent opportunity to investigate how income security programs affect the timing of retirement, and how programs targeted at one spouse can affect the behavior of the other. The results indicate that the introduction of the Allowance is associated with a relative increase in the labor force rates of 6 to 7 percentage points among males in eligible couples. Eligible females did not share the rising employment rates over the 1970s experienced by their counterparts (of the same age) who were not eligible for the Spouse's Allowance.

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Published: "The Retirement Behavior of Married Couples: Evidence fromthe Spouse's Allowance", Journal of Human Resources, Vol. 37, Winter 2002, 1-34.

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