Spouses' Retirement and the Take-Up of Disability Pension

Julian Johnsen, University of Bergen
Kjell Vaage, University of Bergen

This paper studies the effect of one spouse’s retirement on the retirement of the other using a Norwegian early reform, which reduced the retirement age for workers in selected firms. We find that the spouses of those who could retire earlier were less likely to remain in the workforce compared to the spouses of those who could not retire earlier. This finding is compatible with preferences for shared spousal leisure. Contrary to previous findings, wives respond to husbands’ early retirement. However, the findings are less conclusive with respect to husbands’ response to wives’ early retirement. An investigation of the responding wives’ labor market exit strategy reveals that the reform increased their likelihood of retiring with a disability pension. This study contributes to other recent evidence on the influence of of non-health-related factors on the use of disability benefits among older workers.