Does a Wife’s Employment Affect her Husband’s Retirement Decision? : Evidence from Japanese Longitudinal Data

Based on a large longitudinal dataset on Japanese middle-aged and older individuals, the purpose of this study is to investigate whether women’s labor force participation affects their husbands’ retirement decisions. Employing a simple fixed-effects model, a significant positive effect of wives’ labor force participation on husbands’ retirement decisions was found, which seems to imply that a husband’s leisure is complementary to that of his wife. However, when employing instrumental variables such as the wife’s health condition, the existence of care needs in the household, and statutory pensionable age, no significant effect of the wife’s employment on her husband’s retirement decision was found, regardless of employment type. This result indicates that a Japanese wife’s retirement decision is independent of her husband’s employment and marks a sharp contrast with those of western industrialized countries.