Estimating the Health Effects of Retirement

Authors

Abstract

We estimate the magnitude of any direct effect of retirement on health. Since retirement is endogenous to heath, it is not possible to estimate this effect by comparing the health of individuals before and after they retire. As an alternative we use institutional features of the pension system in the United Kingdom that are exogenous to the individual to isolate exogenous variation in retirement behavior. Data used will include both vital statistics and survey data that include both “objective” physical measurements and respondent self- reports. We find no evidence of negative health effects of retirement and some evidence that there may be a positive effect, at least for men.

Key Findings

  • Research examining the effect of health on retirement typically compares the health of individuals before and after they retire and finds negative effects of retirement on health.
  • However, if deteriorating health leads individuals to retire, this approach will tend to exaggerate the negative effects of retirement on health.
  • Using a method that avoids this pitfall, we find that retirement actually has a small positive effect on health in men.

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Project

Paper ID

WP 2007-168

Publication Type

Working Paper

Publication Year

2007
pavement-enterprise