Arthur Van Soest (Tilburg University)

“Home Production and Retirement in Couples: A Panel Data Analysis”

Abstract

We analyze the effects of retirement of one partner on home production by both partners in a couple. Using longitudinal data from the German Socio-Economic Panel on couples in the age group 45-75, we control for fixed household specific effects to address the concern that retirement decisions are correlated with unobserved characteristics that also affect home production. For males as well as females, we find that own retirement significantly increases the amounts of home production. There are negative cross-effects of retirement on home production done by the partner. The income fall at retirement is compensated by an increase in own household production, in spite of the (smaller) negative effect on home production by the partner.