The Joint Retirement Decision and Life Satisfaction of Older Adults
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This dissertation consists of three essays. The first examines the joint retirement decision of couples using a spatial probit model. Previous research has thoroughly examined what occupation-related factors influence an employee's decision to retire. However, an individual's partner may play a role in the decision-making process, particularly if both work outside of the home. The first essay's results indicate that dually-employed households consider their partner's income and health when transitioning out of the workforce. On average, one partner being retired increased the likelihood of the other leaving the workforce by about 13%. The partner's age, Social Security benefits, pension/annuity payments, and health all increase the probability of an individual being retired. The results build on the existing literature by examining dually-employed couples using a spatial autoregressive (SAR) probit model. The SARs model allows for the simultaneous examination of an individual's own financial and health-related characteristics (i.e., pensions, Social Security, medical ailments, etc.) and that of their partners. The data used for this study is from the 2014 wave of the University of Michigan’s Health and Retirement Study (HRS). The second examines the joint retirement decision of couples based on their personality traits. The essay also uses the Health and Retirement Study dataset and explores whether dually-employed couples retired together or separately (retirement dispersion) based on their personality traits. There was no evidence to support that personality traits of either partner are associated with retirement dispersion. The results did show intrapersonal and interpersonal correlations in and across both men and women. The correlation coefficient for the personality traits was much higher when examined within an individual than across partners. Nevertheless, some of the interpersonal correlations were statistically significant. Women's openness to experiences was correlated with the man's openness, conscientiousness, agreeableness, and negatively associated with neuroticism. However, men's openness was only correlated with women's openness to experiences. Conscientiousness in men was positively correlated with woman's openness to experiences, extraversion, and agreeableness. The results support the theory of marriage, as the correlations suggest that personality trait interactions are associated with who an individual marries. However, more research is needed on retirement dispersion as personality traits were not statistically significant predictors of if a couple retires together or separately. The third examines the financial assets and the life satisfaction of older Americans. This essay used data from the 2006 and 2008 waves of the Health and Retirement Study (HRS) to examine the correlation between life satisfaction and wealth during this period of market decline. The result indicates that wealth is correlated with life satisfaction. Other factors associated with life satisfaction are income, not having debt, home without a mortgage, health, being married, and age. For working individuals', income was not a statistically significant indicator of life satisfaction. However, for non-working individuals, it was positively correlated with life satisfaction. Overall, the study suggests two things. First, people are much more likely to be satisfied with their lives if they have more significant wealth. Second, on average, individuals' net of contributions and investment returns increased their wealth through the 2008 financial crisis. However, retired individuals lost roughly over $4,000 in financial assets during the time period. The results suggest most older adults do not take on much equity risk in their portfolios.Embargo status: Restricted until 09/2172. To request the author grant access, click on the PDF link to the left.