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Do the sick retire early? Chronic illness, asset accumulation and early retirement

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  • M. Solaiman Miah
  • Virginia Wilcox-Gok

Abstract

Our objective is to determine how chronic illness affects asset accumulation and retirement. Previous studies have found that poor health leads to early retirement, but those studies failed to look at the indirect impact of chronic illness on retirement. Using data from the Health and Retirement Study, we define an illness as chronic if the individual reports having asthma, cancer, heart disease, stroke or diabetes for four or more years. We first estimate how a chronic illness influences asset accumulation. We then estimate how asset accumulation and current poor health influence retirement. We observe that the vast majority of the chronically ill population do not report their general health to be poor nor do they report functional limitations in activities of daily living. Nevertheless, our results indicate that chronic illness leads these people to accumulate fewer assets during their working years and consequently retire later. Neither researchers nor policy-makers discussing the many critical issues surrounding illness and retirement have addressed this issue.

Suggested Citation

  • M. Solaiman Miah & Virginia Wilcox-Gok, 2007. "Do the sick retire early? Chronic illness, asset accumulation and early retirement," Applied Economics, Taylor & Francis Journals, vol. 39(15), pages 1921-1936.
  • Handle: RePEc:taf:applec:v:39:y:2007:i:15:p:1921-1936
    DOI: 10.1080/00036840600690165
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    6. Subhasree Basu Roy, 2018. "Effect of Health on Retirement of Older Americans: a Competing Risks Study," Journal of Labor Research, Springer, vol. 39(1), pages 56-98, March.
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    8. Thierry Kamionka & Pauline Leveneur, 2021. "The Dynamics of Health, Employment and Working Hours," Working Papers hal-03307591, HAL.
    9. Moon, J. Robin & Glymour, M. Maria & Subramanian, S.V. & Avendaño, Mauricio & Kawachi, Ichiro, 2012. "Transition to retirement and risk of cardiovascular disease: Prospective analysis of the US health and retirement study," Social Science & Medicine, Elsevier, vol. 75(3), pages 526-530.
    10. Dawid Gondek & Ke Ning & George B Ploubidis & Bilal Nasim & Alissa Goodman, 2018. "The impact of health on economic and social outcomes in the United Kingdom: A scoping literature review," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-21, December.
    11. Dimitri Mortelmans & Jorre Vannieuwenhuyze, 2013. "The age-dependent influence of self-reported health and job characteristics on retirement," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 58(1), pages 13-22, February.
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