Ill health and retirement in Britain: a panel data based analysis
AbstractWe examine the role of ill-health in retirement decisions in Britain, using the first eight waves of the British Household Panel Survey (1991-98). As self-reported health status is likely to be endogenous to the retirement decision, we instrument self-reported health by a constructed Ñ¨ealth stock' measure using a set of health indicator variables and personal characteristics, as suggested by Bound et al (1999). Using both linear and non-linear fixed effects estimators, we show that adverse individual health shocks are an important predictor of individual retirement behaviour. We compare the impact of our constructed health measure on economic activity with that arising from the use of other health variables in the data set. We also examine the impact of the 1995 reform of disability benefits on the retirement decision.
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Bibliographic InfoPaper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W03/02.
Length: 28 pp
Date of creation: Feb 2003
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Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Other versions of this item:
- Disney, Richard & Emmerson, Carl & Wakefield, Matthew, 2006. "Ill health and retirement in Britain: A panel data-based analysis," Journal of Health Economics, Elsevier, vol. 25(4), pages 621-649, July.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-04-27 (All new papers)
- NEP-HEA-2003-04-27 (Health Economics)
- NEP-LAB-2003-04-27 (Labour Economics)
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