Health Insurance and Retirement of Married Couples
AbstractHealth insurance is a potentially important determinant of employment behavior at older ages inthe United States. Most health insurance in the U.S. is provided by employers until eligibility forMedicare begins at age 65. A key link between health insurance and employment is that someemployer health insurance plans continue to provide coverage for retirees while others do not.Retiring before age 65 exposes individuals and their spouses who lack retiree health insurancecoverage to the risk of potentially catastrophic medical expenditure. We build a dynamicbehavioral model of the employment decisions of older couples that includes risky medicalexpenditure and health insurance. Estimates of the model allow us to determine the empiricalimportance of health insurance constraints in explaining the timing of retirement of couples.Estimates using data from the Health and Retirement Survey indicate that couples have amoderate degree of aversion to the risk of large medical expenditure. The risk-reducing featureof health insurance can fully account for the relatively modest observed association betweenretiree health insurance and employment for married men, but can account for only about onethird of the large observed association for married women.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2003-41.
Date of creation: 2003
Date of revision:
Other versions of this item:
- Donna B. Gilleskie & David M. Blau, 2006. "Health insurance and retirement of married couples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 935-953.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Blau, David M, 1998. "Labor Force Dynamics of Older Married Couples," Journal of Labor Economics, University of Chicago Press, vol. 16(3), pages 595-629, July.
- Starr-McCluer, Martha, 1996.
"Health Insurance and Precautionary Savings,"
American Economic Review,
American Economic Association, vol. 86(1), pages 285-95, March.
- Alan L. Gustman & Thomas L. Steinmeier, 1993.
"Employer Provided Health Insurance and Retirement Behavior,"
NBER Working Papers
4307, National Bureau of Economic Research, Inc.
- Alan L. Gustman & Thomas L. Steinmeier, 1994. "Employer-provided health insurance and retirement behavior," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(1), pages 124-140, October.
- Hurd, Michael D, 1989. "Mortality Risk and Bequests," Econometrica, Econometric Society, vol. 57(4), pages 779-813, July.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Florian Sallaberry).
If references are entirely missing, you can add them using this form.