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RESEARCH ARTICLE |
a Institute on Aging and Department of Health Policy and Epidemiology, University of Florida, Gainesville
b Population Research Institute and the Department of Sociology, The Pennsylvania State University, University Park
Amy Mehraban Pienta, Institute on Aging, P.O. Box 103505, University of Florida, Gainesville, FL 32610-3505 E-mail: pienta{at}ufl.edu.
Decision Editor: Fredric D. Wolinsky, PhD
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Abstract |
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 TOP Abstract Retirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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Methods. Using data from the 1992 Health and Retirement Study, subjective probabilities of working full-time after reaching age 62 and age 65 are used to measure retirement expectations. The retirement expectations of husbands and wives are modeled simultaneously using a joint-generalized least-squares approach.
Results. Within a marriage, retirement expectations are shaped by individual, spousal, and household characteristics. We observe some gender differences in cross-spousal influence with wives' retirement expectations being more influenced by husbands' resources and constraints than vice versa. Nonetheless, individual and household factors associated with retirement expectations are widely shared by husbands and wives.
Discussion. Husbands and wives both respond to individual and joint constraints and opportunities when planning for retirement. Findings support that there is considerable overlap in retirement planning of husbands and wives during early parts of the retirement decision-making process. However, inequity in cross-spousal influences is a defining characteristic of retirement decision making. Implications for both policy makers and practitioners are briefly discussed.
RETIREMENT is a policy issue that will pervade public debate for many years to come as the retirement of the Baby Boom cohort threatens the security of the Social Security trust fund. Traditional policy solutions to preserve fiscal solvency are most often in the form of financial penalties for early labor force withdrawal. These penalties have long been part of the Social Security pension system (Quinn and Burkhauser 1994
), and they are likely to play a central role in ensuring solvency in the next several decades. Future cohorts of older workers will soon face ever greater age eligibility criteria for full pension benefits as eligibility for full Social Security benefits gradually increases to age 67 between 2003 and 2007. Additional policy changes are likely to occur, and issues such as privatizing Social Security and reducing benefits now occupy center stage in national policy debates.
Projecting the fiscal implications of policies such as these is typically based on research in which retirement behavior is construed as an individual's decision. As Baby Boomers approach the prime retirement ages, however, the retirement decision is increasingly likely to be a family decision—a decision based on two earnings histories, two sources of pension wealth, and two persons' health considerations. The coupling of retirement decisions within a marriage is reinforced by Social Security's structuring of husbands' and wives' benefits around the earnings history of both persons. In this study, we gain new insights into married couples' retirement decisions by examining how retirement expectations are shaped not only by one's own characteristics, but also by those of their spouse, and household characteristics held in common. We also assess how factors influencing retirement expectations differ for husbands and wives, offering new insights into the gendering of retirement decisions within families. Our results contribute to an emerging line of inquiry that is mindful of the pairing of retirement through marriage (Blau 1998; Gustman and Steinmeier 1994; Henretta and O'Rand 1983; Henretta, O'Rand, and Chan 1993; Hurd 1990; O'Rand, Henretta, and Krecker 1992; Pozzenbon and Mitchell 1989; Smith and Moen 1998; Szinovacz, Ekerdt, and Vinick 1994).
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Retirement Plans of Couples |
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TOPAbstractRetirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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, for a review). Where expectations and behavior do not coincide, unanticipated events, such as changes in pension wealth and health, frequently prompt retirement earlier than originally planned (Anderson, Burkhauser, and Quinn 1986), making adaptation to retirement more difficult (Szinovacz 1989).
A related issue is the extent to which factors influencing retirement expectations parallel those associated with retirement behavior. Although the body of empirical work is not dense, available evidence suggests overall congruence in the structure of factors influencing expectations and behavior (Honig 1996a). Like retirement behavior, individuals expect to retire sooner when their nonmarket time is more valuable, health insurance continues after retirement, pension wealth is high, health problems are present, their spouse is retired, and their job tasks are mundane and repetitive (Ekerdt, DeViney, and Kosloski 1996; Honig 1996b; Hall and Johnson 1980; Shaw 1984). Gender differences in the characteristics associated with retirement expectations also align with studies of gender differences in retirement behavior. Like men, women expect to retire sooner if their health insurance continues after retirement, a private pension is available, and pension wealth is sizeable. Somewhat less clear are the effects of health status and job conditions for women's retirement, but it appears that the effects generally parallel those for men (Honig 1996b). Although there is considerable evidence about the retirement expectations of individual workers, very few studies have focused explicitly on retirement expectations as part of a family retirement process.
We take advantage of traditional theoretical frameworks of retirement behavior to lay the foundation for our model of retirement expectations within marriage. For example, we expect that, among dual-earner couples, husbands and wives formulate retirement expectations in response to their work environment where they gather information and accumulate resources. Based on available information and resources, workers forecast their future work and nonwork income, pension entitlements, and the quality of life should they retire. This model would fit actual planning behavior were it not for the fact the most workers return home after work and plan for retirement with their spouse. Marriage provides a context in which the lives, decisions, and choices of married partners are intertwined (Henretta et al. 1993; Riley and Riley 1993). Retirement decisions become joined by virtue of the balance of family and work role negotiations that originate from economic and social needs over the family life course. An important consequence of the intersection of work and family forces is that retirement expectations may be "gendered" within marriage—a point we consider next.
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The Gendering of Retirement Expectations Within Marriage |
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TOPAbstractRetirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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make a fundamental point that guides our analysis of retirement expectations within marriage. Drawing on the work of Treas 1991 and England and Farkas 1986 and others, Henretta and his colleagues emphasize differentiated work and family pathways as key factors in understanding the retirement behavior of couples. Building on this literature, we argue that a fundamental part of men's identity is that of family provider (Gradman 1994), with success benchmarked to the work career (Gradman 1994). Furthermore, we expect that the salience of the work role to men's identity increases with job status (Gradman 1994). Under these circumstances, we expect that men's retirement decisions are closely tied to indicators of success within the work career and the economic demands of their families. Prior research supports this argument, showing, for example, that men delay retirement when working in jobs offering significant intrinsic rewards or when faced with low levels of retirement income and dependent children (Anderson, Clark, and Johnson 1982; Hayward, Friedman, and Chen 1998; Henretta and O'Rand 1983).
Many women retiring in recent years have balanced both work and family demands over much of their adult lives. Substantial numbers of retirement-aged women have interrupted careers because of childrearing demands (O'Rand et al. 1992) and the caring of older family members (Hatch and Thompson 1992). For these women, interruption of the work career because of family demands suggests that work attachment is a less salient aspect of these women's lives compared with women who are life-long members of the labor force. Observed retirement patterns of women are consistent with this interpretation—women with uninterrupted careers during the childbearing years are more likely to delay retirement compared with women with interrupted careers in the childbearing years (O'Rand et al. 1992; Pienta, Burr, and Mutchler 1994). There is less evidence of the effects of working conditions on women's retirement behavior.
Reinforcing the effects of differential family roles is the gender inequity in resources derived from the work career. Men's resources generally are greater than women's, suggesting that husbands' plans and resources are more influential for women's plans than vice versa. Research findings, however, are ambiguous on this point. Studies based on data from the 1970s suggest the husband's expectations and resources are the dominant force in couples' retirement decision making (Anderson et al. 1982; Shaw 1984). More recent studies (Gustman and Steinmeier 1994; Honig 1996b) point to a shift toward greater equity such that both partners in a marriage have a strong predisposition toward joint retirement. This is reflected in the fact that the work status of the husband (or wife) is strongly associated with delayed retirement of a spouse.
Our study brings these issues into empirical focus by modeling retirement expectations as a function of individual, spousal, and household characteristics that arise from the work career and family life course. What influences do the individual and shared life-course experiences and resources of husbands and wives have on both their own and their spouse's retirement expectations? We are also able to examine the additional implications of household retirement planning behavior. As partners look toward retirement, we anticipate that those who have discussed retirement plans with their spouse have more crystallized expectations. More than likely, such planful behavior is indicative of a more general pattern of negotiation that evolves through the balancing of work and family demands over the course of a marriage.
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Methods |
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TOPAbstractRetirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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). The target population of the HRS is persons aged 51–61 years and their spouses or partners; spouses or partners are potentially younger or older than age-eligible respondents. Comparable information is available for both husbands and wives on a variety of topics, including demographic characteristics, health and disability, current/past job characteristics, retirement plans and expectations, net worth, income, and health insurance.
In this study, we restrict the analytic sample to age-eligible respondents who are married or cohabiting and both partners are in the work force (Chevan 1996). This makes it possible to examine the prospective retirement plans of dual-earner partners and thus cross-spousal influences of work characteristics. Regardless of whether a couple is married or cohabiting, the term spouse is used to denote a partner. We exclude couples if either spouse is younger than age 45 (n = 276), because it is less likely that younger respondents have reasonable expectations about retirement timing and will be more prone to give information based on normative retirement ages. About 8% of couples contain missing data on the dependent variable for one of the spouses (n = 158 couples). The resulting analytic sample includes 1,818 married and cohabiting couples for which we have complete data.
Retirement Expectations
We measure retirement expectations based on the following question: "Thinking about work generally and not just your present job, what do you think are the chances that you will be working full time after you reach age 62?" The response set is a scale ranging from 0 to 10, in which 0 equals "absolutely no chance" and 10 equals "absolutely certain." We transform these values into subjective probabilities by dividing each value by 10, thus a respondent's probability ranges from 0 to 1 (see Honig 1996b, for an example of this strategy). A value of one can be interpreted as having a high expectation of continued work after reaching age 62, conditional on working currently. Values closer to zero represent stronger expectations of early retirement. We also construct a measure of delayed retirement expectations, i.e., expectations of working full time past age 65, conditional on working currently and having some expectation of working past age 62.
Not surprisingly, retirement expectations are not normally distributed—the probabilities cluster at the extremes of the distribution. We thus transform the subjective probabilities into a cumulative logistic function (Pindyck and Rubinfeld 1976). Using the subjective probability of working full time after age 62 for illustration, the transformation is ln(P62/1 - P62). The slope of the cumulative logistic distribution is greatest at P62 = 1/2, which implies that changes in independent variables will have their greatest impact on the probability of tending to be more neutral in plans for retirement. The low slopes near the endpoints of the distribution require larger changes in independent variables to bring about a small change in probability. This transformation allows us to use joint generalized least-squares (GLS) estimation, which is described below.
Work Conditions and Resources
The HRS contains an array of work-related measures that define the structural imperatives of work (i.e., factors defining the day-to-day qualities of work activity) that influence retirement behavior (Hayward et al. 1998; Hayward, Grady, Hardy, and Sommers 1989; Hurd and McGarry 1993; Spenner 1988). Two measures of job demands (physical and cognitive) are derived from a factor analysis of eight items assessing current job requirements. Using the Promax rotation method, an exploratory factor analysis supports a two-factor structure (eigenvalues: 2.45 and 1.98): physical demands and cognitive demands. Jobs that are physically demanding involve physical effort, lifting heavy loads, and bending over. Jobs that are cognitively demanding involve good eyesight, intense concentration (or attention), analyzing data (or information), keeping a pace set by others, and learning new things. Physical demands factor loadings range from .85 (job requires stooping or bending) to .87 ( job requires lifting heavy objects) explaining 21.6% of the variance (21.4% variance is explained when the other factor is eliminated). Cognitive demands factor loadings range from .57 (job requires good eyesight) to .72 ( job requires concentration) explaining 18.6% of the variance (18.5% variance is explained when the other factor is eliminated). The interfactor correlation is -.076. Average scores for each set of items are calculated with Cronbach's alphas of .84 and .64 for physical and cognitive demands, respectively. Higher scores reflect greater job demands.
The retirement-related extrinsic rewards of work are measured in terms of pension eligibility status (no coverage available; has pension coverage, but not yet eligible; and currently receiving or eligible to receive benefits), private pension wealth, and health insurance coverage. Pension wealth is its present value at time of the 1992 interview. Pension wealth is a constructed measure obtained from the HRS web site (see www.umich.edu/~hrswww/center/rescont2.html for a complete description of this measure). The measure is based on self-report information and potentially reflects the promise or receipt of employer-provided pension benefits from up to three current or prior jobs. Health insurance references whether the respondent is uninsured, has employer-provided insurance either through one's own employer or spouse's employer, or has health insurance from a nonemployer source (including privately purchased and government-provided health insurance, such as Medicaid).
Self-employment establishes whether retirement plans are tied to one's position in a bureaucratic organization (Ekerdt, Hackney, Kosloski, and DeViney 2001; Hayward et al. 1998). This is important because self-employed workers encounter less social regulation of work careers (Ekerdt et al. 2001). Also, self-employed men and women may work longer because self-employed workers earn less than their non–self-employed counterparts (Hamilton 2000). Self-employment is attractive to many workers because it includes many nonpecuniary benefits, such as greater autonomy, flexibility, intrinsic job satisfaction, and self-expression (Carr 1996; Hamilton 2000). For all of these reasons, self-employment is expected to increase expectations for delayed retirement. This is consistent with a recent study showing that self-employed workers have greater uncertainty about retirement timing (Ekerdt et al. 2001). We also control for part-time work (less than 35 hours/week) because part-time workers are likely to have lower labor market attachment than full-time workers.
Health Characteristics
All else being equal, health is a primary motive for retirement with those in the poorest health either retiring or becoming work disabled. In part, workers in poor health may attach higher value to retirement than work. A related issue is that health problems may make it more difficult to keep up with the daily demands of work. Most retirement research examining the effects of health relies on a work limitations measure (i.e., Does the respondent report a health condition that limits the amount or type of work they can do?) Like prior studies, we make use of the health measure evaluating the presence of a health condition that limits work ability (1 = limited in the amount or kind of work; 0 = otherwise).
We expand the measurement of health to include serious chronic disease conditions that affect not only functional status, but also a person's motivation to work (Verbrugge and Jette 1994; Wolinsky, Armbrecht, and Wyrwich 2000). We have chosen to focus on serious chronic health conditions (Ferraro and Farmer 1999) for the following reasons. First, serious chronic illnesses may either increase the value of leisure relative to work and contribute to early retirement expectations or shorten one's time horizon for achieving one's goals. Conversely, delayed retirement expectations may result when a person attempts to manage a serious chronic illness, thereby increasing the need for health care insurance or income. Serious chronic conditions are measured using self-report of whether a doctor has ever told the respondent that he/she has hypertension, coronary heart disease, stroke, cancer (nonskin), diabetes, or chronic lung disease. For simplicity, we create a measure in which each condition is given equal weight (1 = condition present, 0 = not present) and summed together to form a single measure.
Household Planning Behavior
The HRS includes a measure of prior retirement planning activities of couples. Respondents are asked how frequently they have discussed retirement plans with their spouse. The range of responses is "hardly at all" (scored as 1) to "a lot" (scored as 4). Missing information is randomly assigned a value based on the variable's distribution. Although we anticipate that household planning behavior influences retirement expectations, it is also possible that an individual's retirement expectations also affect household planning. Thus, we caution against interpreting the association between retirement planning behavior and retirement expectations in strong causal terms, and we think it likely reflects the fact that the effect is overestimated.
Household Family Characteristics
Family characteristics define the immediate and past constraints and opportunity costs of both partners. Couples "share" childrearing responsibilities, for example, although there may be a division of tasks for husbands and wives. A particularly salient issue, from a retirement planning perspective, is the presence of dependent children in the household. Couples who have chosen either to delay childbearing or to postpone the end of their childbearing activities are likely to enter their retirement years with children living at home (or temporarily away at school).
We also examine the effects of the overall level of income and wealth within the household. The household income of dual-earner couples reflects both the resources immediately available, as well as the opportunity costs associated with early retirement. Net worth is a measure of assets less the debts of a household.
Demographic Characteristics
We construct measures for various sociodemographic factors that differentiate retirement experiences in the population. These measures include age, education (years of completed schooling), and race/ethnicity (White, African American, Hispanic, and other non-Whites [including Asian, Pacific Islander, American Indian, or Alaskan native]). African American men typically exit the labor force at higher rates than White men (Burr, Massagli, Mutchler, and Pienta 1996; Hayward, Friedman, and Chen 1996), whereas African American women work longer than White women (Pienta et al. 1994). Hispanic men have lower rates of labor force exiting than African American and White men. Hispanic women have higher rates of exiting than other women (Flippen and Tienda 2000).
Spouse Characteristics
The joint nature of husbands' and wives' retirement is also captured by assessing the effects of the spouse's expectations on the respondent's own expectations, and the effects of several other relevant spousal attributes. Because the spouse's expectation is potentially endogenous in our model (i.e., the individual's and spouse's expectations are simultaneously determined), we used an instrumental variables approach to reduce the endogeneity problem. Our basic approach was one in which we attempted to select as many predictors strongly associated with the spouse's expectations, but not strongly associated with the individual's expectations, as possible (Heckman 1997). In this analysis, we regressed the spouse's expectations on their age, education, self-reported health, pension wealth, expectations of living to ages 75–92, and reasoning ability (results available from the authors), separately for expectations of early and delayed retirement. Based on the estimated parameters, we calculated a predicted score for the spouse's expectations and included this as our measure of spouse's expectations in the modeling of a person's retirement expectations.
Other key spouse characteristics include age, health, and pension wealth. Spouse's age, net of one's own age, captures the tendency to conform to a spouse's age-related retirement schedule. When a spouse is older, we expect this to increase the probability that a person will expect to retire early. The effect of spousal health is ambiguous. A spouse in poor health may increase the attractiveness of joint "leisure," or it may have the opposite effect of requiring a worker to remain in the labor force to meet the financial needs of the couple. Finally, we consider whether access to a spouse's pension benefits increases early retirement expectations.
Analytic Model
In estimating a retirement expectations model, we adopt an analytic approach that allows us to gauge cross-spousal influences allowing for the correlation of husbands' and wives' unmeasured retirement preferences (Gustman and Steinmeier 1994). Another aspect of this problem is that spouses may have retirement preferences that are unmeasured in our model, but that are highly correlated. Gustman and Steinmeier 1994 give an example of correlated retirement preferences arising from assortative mating (e.g., men and women with similar preferences for early retirement may marry).
Because it is not possible to include all theoretically relevant information about husbands' and wives' retirement preferences, our modeling approach adjusts the error structure of both spouses by taking into account a correlated error structure in the husbands' and wives' expectations models. We do this by estimating husbands' and wives' retirement expectations with a joint GLS model—also referred to as a "seemingly unrelated regression" (SURE) model (Zellner 1962). An example of an application of the SURE model is a study by Simpson and Wilson 1987, who attempted to capture the correlation between spouses' plans within dual-earner couples from unobserved heterogeneity.
The joint GLS model takes the following form based on the conceptualization of retirement expectations:
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Ph represents the husband's subjective probability of working full time after age 62 (or age 65), and Pw is the wife's subjective probability. Recall that Ph and Pw are transformed using a cumulative logistic distribution function so that ordinary least squares (OLS) can be used for estimation. Each spouse's expectation is presumed to be a function of a vector of "i" work characteristics, "j " health characteristics, "k" family characteristics, and so on. Note that the model includes a vector of "m" spouse characteristics described previously.
The method allows the disturbances (
h and w) to be correlated across the two equations, because there is reason to suspect that this is the case. The estimator for this set of equations is obtained in two steps. In the first step, a cross-equation covariance matrix is computed from residuals from the two separate equations estimated with OLS. This matrix is then used to weight the final estimates' retirement expectations. The SURE model is estimated using PROC MODEL in SAS. The SAS procedure produces a system-weighted R2 computed using the cross-equation correlation matrix.
In the analysis that follows, nested models are estimated in which the base model includes only individual characteristics. A second model introduces spousal and couple-level characteristics (spouses' plans, spouses' characteristics, and household constraints/resources). The nested models allow us to assess how the effects of person-specific retirement predictors are altered when taking into account spousal resources and expectations. The full model is the basis on which we evaluate the direct effects of spousal and household influences on a partner's expectations. Because we estimate models for both husbands and wives, we are able to compare whether factors influencing retirement expectations are dependent on gender. We use an F test in the two nested models of husbands and wives to formally test for the equivalence of effects. Values in the tables are underlined to indicate statistically different predictors of husbands' and wives' plans (significant at the .05 level and adjusted for shared covariance across the models), providing insights into the gendering of retirement expectations among married couples.
Two sets of nested models are estimated: one for early retirement (i.e., the subjective probability of working full time after age 62) and the other for delayed retirement (the subjective probability of working full time past age 65). The analysis of delayed retirement expectations is based on a subset of the sample who had at least some expectation of working past age 62. In other words, we analyze couples that attach some probability to working past age 62 (Ph and Pw are both greater than zero). For couples thinking about working past age 62, the probability of working past age 65 is regressed on comparable independent variables. Again, positive coefficients indicate stronger plans for delaying retirement past age 65. Finally, the system-weighted R2 (joint GLS) is compared with the adjusted R2 (OLS) to evaluate whether we improve upon the individual estimation of retirement expectations.
Selection
Because couples are excluded when at least one spouse has already left the labor force, we estimated a selection model to evaluate whether the selection of dual-earner couples biases our results. For example, it is possible that more traditional couples or couples that are more age heterogamous are excluded in our models. Because the potential exists for introducing selectivity into our analysis, we estimated a two-stage selection model (Berk 1983; Heckman 1979). In the first stage, a number of independent variables were chosen that were related to sample inclusion, but not the dependent variable (retirement expectations). The full set of predictor variables included the following: both partners' ages and education, the race/ethnicity of the household head, number of offspring, number of children living in the household or at school, and equality in decision making. The results showed that excluded couples differ from those in our analysis mainly in that the husband tends to be older, the wife tends to be younger, the wife tends to be less educated, the couple has a larger number of children, and the couple does not engage in egalitarian decision making. The second-stage model (see results in Table 2 and Table 3 ) included a selection correction term calculated from the parameter estimates of the first model. Although our results remain the same whether we correct for selection or not, we present the results correcting for sample selection.
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Results |
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TOPAbstractRetirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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Husbands attach a much higher probability to working full time after age 62 than do wives (Ph = .51 compared with Pw = .36). Husbands are also more likely to expect to continue working full time after age 65 than are wives (Ph = .38, whereas Pw = .29). Both findings reinforce the idea that women maintain a somewhat weaker attachment to the labor force—in part this may be because wives in these birth cohorts have had substantially less work experience throughout their lives. These findings also demonstrate the enormous popularity of early retirement given that neither husbands or wives report strong probabilities of working full time after age 62 or age 65. Husbands' and wives' expectations about the timing of retirement are interrelated, with correlation coefficients of .28 and .23 (expectations about retirement upon reaching ages 62 and 65, respectively) that are statistically significant (results not shown).
Early Retirement Expectations
Early retirement expectations of husbands and wives are explored in greater detail in Table 2 to determine similarities and differences in the factors associated with husbands' and wives' early retirement expectations. The results for Models 1 and 2 show that, although there is considerable similarity across spouses, age and health influence the early retirement plans of husbands and wives differently. Age has a much smaller impact on wives' early retirement expectations than it does on husbands' expectations (.053 and .259, respectively, in Model 2). Both husbands and wives who are older are more likely to expect to work full time after reaching age 62, but this effect is statistically significant for men and not women. The overall age pattern may reflect a combination of factors, such as age selectivity (i.e., who is still in the labor force when queried about expectations), more accurate forecasts among older workers, and potential cohort differences.
We expected chronic health conditions and work disability to be positively associated with the early retirement expectations of both husbands and wives based on the idea that declining health signals a shorter work career. Our results for husbands are consistent with this expectation. Husbands who have been diagnosed with a serious chronic condition have weaker expectations of working past age 62. Wives in poorer health, however measured, do not differ significantly from wives in good health in their retirement expectations. Health is surprisingly not associated with wives' expectations.
Attributes of work have equivalent effects on husbands' and wives' early retirement expectations. Our results show that men and women expect to work longer in jobs with greater cognitive demands and jobs in which workers are self-employed. Greater pension wealth is negatively associated with husbands' and wives' expectations of working full time after age 62. As shown in Model 1, the absence of health insurance increases the probability of husbands' and wives' early retirement, although this effect is reduced and no longer significant once the spouse's characteristics are included as control variables.
Spouse and household characteristics provide additional insight into the retirement plans of couples (Model 2, Table 2 ). Husbands' work disabilities, pension eligibility, and pension wealth all decrease wives' expectations of working after age 62 (see Model 2, Table 2 ). Husbands' retirement expectations, however, are not influenced by wives' health and pension characteristics. Although the pattern of these spousal effects suggests that husbands play a more significant role in women's retirement decisions than vice versa, we note that the differences are not statistically significant. Discussing retirement plans with a spouse is associated with lower expectations of working full time after age 62 for both husbands and wives, but particularly so for husbands. Although potential endogeneity problems make it difficult to make strong inferences about this association, it strongly suggests that retirement decisions are the outcome of household planning involving both the husband and the wife.
Both husbands and wives living in wealthier households are less likely to plan to continue working after age 62 (Model 2, Table 2 ). Financial constraints, particularly those defined by household wealth, clearly limit choices about the timing of retirement. Household wealth allows both partners in a marriage greater freedom to choose leisure over work. Another economic challenge faced by many retirement-age couples is providing for dependent children in the household. Our results suggest that husbands, but not wives, plan to postpone retirement when dependent children live in the home—a possible product of men's greater earnings.
Delayed Retirement Expectations
The availability of full Social Security benefits at age 65 raises the possibility that the mix of factors influencing delayed retirement differs from that influencing retirement expectations under conditions of reduced benefits. To evaluate this question, we modeled expectations of working full time after age 65 among persons who, at a minimum, are uncertain about early retirement. In other words, this model includes couples where both partners report the probability of working full time after age 62 is greater than zero.
Similar to our results for early retirement, the age gradient is steeper for men, and health has little effect on women's expectations. More years of education increase expectations of delayed retirement for both husbands and wives (see Model 1, Table 3 ), although the education effect is attenuated for wives once spouse characteristics are controlled for.
Work characteristics are related to delayed retirement expectations. Cognitive job demands significantly increase the delayed retirement expectations, although no such effects are observed for wives. The effect of cognitive demands for men is consistent with prior research documenting lower rates of retirement among male workers in these positions (Hayward et al. 1998). Physical job demands, on the other hand, are positively associated with expectations of wives' working full time after age 65. The positive effect of physical job demands on women's expectations is contrary to what one would expect under the "wear-and-tear" effects of a demanding work environment. Other research, however, indicates that physical demands in late life jobs have positive benefits for men's health, after controlling for selection into these jobs (Moore and Hayward 1990). As such, physical demands may actually increase the relative value of work over leisure. Self-employed husbands and wives, net of all other factors, are more likely to anticipate delayed retirement. Because we control for health, and pension and asset wealth, we suggest that this effect reflects self-employed individuals' flexibility to adjust their work behavior in accordance with their health or preferences for work.
Wives' pension wealth significantly reduces expectations to delay retirement, although no comparable effect is observed for husbands (but this is not statistically significant). Among husbands, the absence of health insurance is positively associated with expectations for delayed retirement as is nonemployer health insurance coverage. Husbands with employer-provided health insurance are the least likely to expect to delay retirement. Unlike our observations of early retirement expectations, health insurance does not significantly shape wives' delayed retirement expectations, and the difference between husbands and wives is statistically significant.
Like early retirement expectations, delayed retirement expectations are related to retirement planning with spouse. Household planning behavior is associated with expectations of retiring earlier. Again, the husband's work disability status reduces his wife's expectations of working after age 65. Whether the wife's response to her husband's health needs reflects the need for caregiving is not clear in our analysis.
When comparing the model fit of the joint GLS estimation (system-weighted R2) with OLS estimation (adjusted R2), we find that joint GLS may be a somewhat more efficient estimator. For example, in the fully specified models in Table 2 (Model 2), only 17% (husbands) and 12% (wives) of the variance in retirement expectations was explained using OLS, whereas 15% of the variance was explained with joint GLS estimation. Individually estimated models explained a smaller portion of the variance in wives' retirement expectations at age 65 than joint models, as well. This suggests that our models have tapped into important couple-level dimensions of the planning process, in particular improving the explanatory model for wives in dual-earner couples.
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Discussion |
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TOPAbstractRetirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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). Although the factors shaping wives' expectations are less well known, like husbands', women's plans respond to working conditions and pension wealth. Such equivalent pension wealth effects, however, should be considered alongside studies that report on aggregate gender differences in pension wealth. In our study, wives have accumulated pension wealth that is one-third the value of the pension wealth of husbands. Hardy and Shuey 2000 noted persistent structural differences in women and men's employer-provided pensions that place women at a disadvantage. Our results suggest that marriage may provide an important financial safety net that heightens the importance of wives' pension wealth in their retirement decision making, even though their levels of pension wealth lag behind those for men.
Consistent with prior research, we find an association between early retirement and workers' labor market vulnerabilities. Vulnerabilities defined by lower education and being African American weaken connections to work. In contrast to Flippen and Tienda 2000, our results indicate that Hispanics' retirement expectations do not differ from those of Whites. One possible explanation is that the present study selects only married couples and investigates retirement expectations rather than retirement behavior.
Characteristics of the spouse and household are important predictors of retirement expectations. In terms of household factors, husbands' and wives' expectations of early retirement increase as household wealth increases. Husbands, though not wives, expect to delay retirement if dependent children reside in the household. Also, household planning behaviors tend to accompany spouses' plans to retire early. This finding suggests that planful behavior in household decision making is important for the joint maximization of leisure among husbands and wives. We observe asymmetry, however, in the effects of the spouse's health and pension characteristics on their partner's expectations. Although most gender differences in spousal effects do not differ statistically, the pattern of effects points to a stronger influence of husbands on wives' retirement expectations than vice versa. Inequity remains a defining feature of retirement decision making within marriage.
An important gender difference to emerge from our analysis is the extent to which a person's health influences their retirement expectations. Unlike husbands', wives' expectations do not appear to be sensitive to health. Given the pre-eminence of health effects in the retirement literature, the absence of such effects for wives was unexpected. One possible explanation is that health problems are less severe among wives of the ages considered here. On the other hand, wives are more likely to expect early retirement when their husbands have a work disability. Wives appear to take into account their spouse's health rather than their own when formulating retirement expectations.
Increasingly, economists and sociologists point to the importance of investigating retirement as a household decision (e.g., Anderson et al. 1982; Blau 1998; Gustman and Steinmeier 1994; Henretta et al. 1993). Despite growing recognition of the theoretical importance of household decision-making perspective, much of the research on retirement behavior continues to focus on individual resources. The results shown here, however, demonstrate that retirement expectations are not simply borne out of an individual's own achievements in the labor market, but they very much reflect the resources and expectations of their spouse (particularly for women), household factors such as asset wealth, and household planning behavior.
Considerable theoretical and empirical research reinforces the idea that husbands and wives invest in marriage. Forms of family organization develop early in marriages out of negotiations involving work/family activities. Because lifelong family organizational strategies maintain and enhance family well-being, it should not be surprising that retirement decisions are intimately tied to planning behavior, household factors, and the spouse's expectations and resources. This conclusion speaks to institutional factors that reinforce retirement as a family decision. Social Security benefits in particular are structured not on individuals' earnings histories, but on the earnings history of the husband and wife within a family. As policy makers plan to address concerns surrounding a growing pool of older workers, it is important to be mindful of the pairing of retirement plans and retirement behavior (Henretta and O'Rand 1983) that occurs through marriage. Very often, it is neither his retirement nor her retirement but their retirement that alters the landscape of pension beneficiaries and the timing of retirement in the population.
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Acknowledgments |
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We thank Angela O'Rand and Diane McLaughlin for insightful comments on an earlier draft of this manuscript, and Kristi Rahrig Jenkins for her research assistance.
Received for publication November 15, 2000. Accepted for publication September 13, 2001.
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TOPAbstractRetirement Plans of CouplesThe Gendering of Retirement...MethodsResultsDiscussionReferences |
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