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SeaTE: Subjective Ex Ante Treatment Effect of Health on Retirement

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  • Pamela Giustinelli
  • Matthew D. Shapiro

Abstract

The paper studies the effect of health on work among older workers by eliciting two- and four-year-ahead subjective probabilities of working under alternative health states. These measures predict work outcomes. Person-specific differences in working probabilities across health states can be interpreted as Subjective ex ante Treatment Effects (SeaTEs) in a potential outcomes framework and as taste for work within a discrete choice dynamic programming framework. There is substantial heterogeneity in expectations of work conditional on health. The paper shows how heterogeneity in taste for work correlated with health can bias regression estimates of the effect of health on retirement.

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  • Pamela Giustinelli & Matthew D. Shapiro, 2024. "SeaTE: Subjective Ex Ante Treatment Effect of Health on Retirement," American Economic Journal: Applied Economics, American Economic Association, vol. 16(2), pages 278-317, April.
    • Handle: RePEc:aea:aejapp:v:16:y:2024:i:2:p:278-317
    DOI: 10.1257/app.20210316
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    Cited by:

    1. Gong, Yifan & Stinebrickner, Ralph & Stinebrickner, Todd, 2022. "Marriage, children, and labor supply: Beliefs and outcomes," Journal of Econometrics, Elsevier, vol. 231(1), pages 148-164.
    2. Gizem Koşar & Cormac O'Dea, 2022. "Expectations Data in Structural Microeconomic Models," NBER Working Papers 30094, National Bureau of Economic Research, Inc.
    3. Yifan Gong & Todd Stinebrickner & Ralph Stinebrickner, 2020. "Perceived and actual option values of college enrollment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 35(7), pages 940-959, November.
    4. Favara, Marta & Freund, Richard & Perez-Alvarez, Marcello, 2023. "What If It Never Happened? Subjective Treatment Effects of a Negative Shock on Youth Labour Market Outcomes in Developing Countries," IZA Discussion Papers 16417, Institute of Labor Economics (IZA).
    5. Ye, Xiaoyang & Zhai, Muxin & Feng, Li & Xie, A’na & Wang, Weimin & Wu, Hongbin, 2022. "Still want to be a doctor? Medical student dropout in the era of COVID-19," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 122-139.
    6. Aucejo, Esteban M. & French, Jacob & Ugalde Araya, Maria Paola & Zafar, Basit, 2020. "The impact of COVID-19 on student experiences and expectations: Evidence from a survey," Journal of Public Economics, Elsevier, vol. 191(C).
    7. Stephane Bonhomme & Angela Denis, 2023. "Estimating Individual Responses when Tomorrow Matters," Papers 2310.09105, arXiv.org, revised Dec 2023.
    8. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.

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    More about this item

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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