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Retirement and Unexpected Health Shocks

Author

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  • Bénédicte Apouey

    (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Cahit Guven

    (Deakin University [Burwood])

  • Claudia Senik

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UP4 - Université Paris-Sorbonne)

Abstract

Is retirement good for your health? This article explores the impact of retirement on unexpected health evolutions. Using data from the annual Household, Income and Labour Dynamics in Australia survey (2001-2014), we construct measures of the mismatch between each person's expected and actual health evolution (hereafter, "health shocks"). We find that after retirement, the probability of negative shocks decreases and the likelihood of positive health shocks increases, for both genders. These shocks translate into variations of life satisfaction in the same direction (i.e. unexpected positive health shocks increase life satisfaction). Other indicators of mental and physical health taken from the SF-36 vary in the same way, i.e. improve unexpectedly after retirement. By definition, health shocks are immune to the problem of reverse causality that could run from health to retirement. Hence, our findings are consistent with a positive impact of retirement on health.

Suggested Citation

  • Bénédicte Apouey & Cahit Guven & Claudia Senik, 2019. "Retirement and Unexpected Health Shocks," PSE Working Papers halshs-01670486, HAL.
    • Handle: RePEc:hal:psewpa:halshs-01670486
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01670486v3
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    Cited by:

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    2. Bénédicte Apouey, 2020. "Conditions of Existence and Subjective Perceptions of Retirement: Quantitative Evidence from France," Working Papers halshs-02908456, HAL.
    3. Anita Abramowska-Kmon & Wojciech Łątkowski, 2021. "The Impact of Retirement on Happiness and Loneliness in Poland—Evidence from Panel Data," IJERPH, MDPI, vol. 18(18), pages 1-15, September.
    4. Lawrence C. Pellegrini & Kimberley H. Geissler, 2019. "Supplemental Security Income enrollment and health care and social assistance employment and wages," International Journal of Health Planning and Management, Wiley Blackwell, vol. 34(4), pages 1319-1332, October.
    5. Mattia Filomena & Matteo Picchio, 2023. "Retirement and health outcomes in a meta‐analytical framework," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1120-1155, September.
    6. Bénédicte Apouey, 2020. "Conditions of Existence and Subjective Perceptions of Retirement: Quantitative Evidence from France," PSE Working Papers halshs-02908456, HAL.
    7. Andrew E Clark & Rong Zhu, 2023. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," Working Papers halshs-04335808, HAL.

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    More about this item

    Keywords

    Health Shocks; Retirement; Life Satisfaction; Australia; HILDA; Health;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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