Abstract
We examine whether husband’s and wife’s retirement decisions are interrelated,
and whether they are positively related due to leisure complementarity or negatively related due to liquidity constraints, using SHARE survey data for Israel.
We subsequently study the effects of those retirement decisions on food expenditures. To deal with the endogeneity of retirement choices, we use the legal retirement date of each spouse as an instrument for actual retirement. The 2004 retirement age reform which was applied gradually by an individual’s month of birth, provides substantial heterogeneity in the legal retirement date for individuals in our sample. For dual income households, we found that the likelihood of both male and female individuals to retire increases with the retirement of their spouse, supporting the leisure complementarity hypothesis. In addition, husband’s retirement reduced expenditure on food, while wife’s retirement had no significant effect on food expenditure. In single income households the negative effect of the husband’s retirement disappears. This may be due to changing roles of husbands in home production after retirement in dual income households, but not in single income households. We found a negative effect of retirement of single males on food expenditure but not of retirement of single females. We conclude that the effect of retirement on food expenditures is mainly due to increased home production of meals, reducing the monetary cost of meals.
and whether they are positively related due to leisure complementarity or negatively related due to liquidity constraints, using SHARE survey data for Israel.
We subsequently study the effects of those retirement decisions on food expenditures. To deal with the endogeneity of retirement choices, we use the legal retirement date of each spouse as an instrument for actual retirement. The 2004 retirement age reform which was applied gradually by an individual’s month of birth, provides substantial heterogeneity in the legal retirement date for individuals in our sample. For dual income households, we found that the likelihood of both male and female individuals to retire increases with the retirement of their spouse, supporting the leisure complementarity hypothesis. In addition, husband’s retirement reduced expenditure on food, while wife’s retirement had no significant effect on food expenditure. In single income households the negative effect of the husband’s retirement disappears. This may be due to changing roles of husbands in home production after retirement in dual income households, but not in single income households. We found a negative effect of retirement of single males on food expenditure but not of retirement of single females. We conclude that the effect of retirement on food expenditures is mainly due to increased home production of meals, reducing the monetary cost of meals.
| Original language | American English |
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| Number of pages | 37 |
| State | Published - 2021 |
| Externally published | Yes |
Publication series
| Name | Discussion Paper Series |
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| Publisher | The Center for Agricultural Economic Research, Department of Environmental Economics and Management |
| Volume | 5.21 |