centre for microdata methods and practice

ESRC centre

cemmap is an ESRC research centre


Keep in touch

Subscribe to cemmap news

Interdependent durations in joint retirement

Authors: Bo E. Honoré and Áureo de Paula
Date: 11 March 2013
Type: cemmap Working Paper, CWP05/13
DOI: 10.1920/wp.cem.2013.0513


In this paper we specify and use a new duration model to study joint retirement in married couples using the Health and Retirement Study. Whereas conventionally used models cannot account for joint retirement, our model admits joint retirement with positive probability, allows for simultaneity and nests the traditional proportional hazards model. In contrast to other statistical models for simultaneous durations, it is based on Nash bargaining and it is therefore interpretable in terms of economic behaviour. We provide a discussion of relevant identifying variation and estimate our model using indirect inference. The main empirical finding is that the simultaneity seems economically important. In our preferred specification the indirect utility associated with being retired increases by approximately 10% if one's spouse is already retired. By comparison, a defined benefit pension plan increases indirect utility by 20-30%. The estimated model also predicts that the indirect effect of a change in husbands' pension plan on wives' retirement dates is about 10% of the direct effect on the husbands.

Download full version
New version:
Bo E. Honoré and Áureo de Paula March 2014, Interdependent durations in joint retirement, cemmap Working Paper, CWP08/14, Institute for Fiscal Studies

Search cemmap

Search by title, topic or name.

Contact cemmap

Centre for Microdata Methods and Practice

How to find us

Tel: +44 (0)20 7291 4800

E-mail us