The Insurance Role of Household Labor Supply around Retirement.

Published: 2014
Project ID: UM14-07


This project has two objectives. The first is to investigate the insurance role of spousal labor supply for married couples nearing retirement. Specifically, we will consider households in which one spouse experiences a job loss, wage shock or health shock, and we will explore how household labor supply adjusts following the shock. The elasticity of one spousal’s labor supply with respect to shocks hitting the other spouse is a key measure of the extent of intra-household insurance opportunities. Moreover, this parameter will be important in determining the household’s demand for and valuation of Social Security and Disability Insurance. Our second objective is to estimate the role of household labor supply in allowing households to smooth consumption near the time of retirement.


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