Retirement in Non-Cooperative Families

Abstract This paper presents a non-cooperative model of family labour supply which accounts for the sociological fact that the role distribution between husband and wife is different across different types of families. The role distribution is modeled by sharing rules defining how income and housework is distributed among family members. The model is applied to the analysis of the retirement decision of spouses. Four types of family structures are studied more closely: Independent partners, income sharing partners, partriarchal families, and housework sharing partners. It turns out that with the still predominating partriachal family structure an increase of the minimum retirement age may affect both partners in a different way. While an increase of the wife's minimum retirement age definitely increases also the retirement age of the husband, an increase of the minimum retirement age of the husband may induce earlier retirement of the wife. Thus, the model provides a theoretical explanation for the asymmetric retirement of spouses observed in recent empirical studies.