No “Honeymoon Phase” Whose health benefits from retirement and when

We use a fixed effects instrumental variable approach to investigate whether retirement affects health only temporarily during a honeymoon phase or if health effects materialize after retirement and remain. The normal and early retirement age thresholds are used as instruments. Six health aspects are considered: self-assessed health, depression, limitations in (instrumental) activities of daily living, mobility limitations, grip strength and number of words recalled. Using data for 10 countries from the Survey of Health, Retirement and Ageing in Europe (SHARE), we find that retiring both at the normal and early retirement eligibility ages significantly improves all health aspects, including the objective measure grip strength. Other than hypothesized, results do not show a health boost during the honeymoon phase. Instead, individuals, especially blue-collar workers, go through an adjustment period after retiring, in which they experience more health problems, before stabilizing and improving. Overall, retirement has a health preserving effect for both genders and all occupations in the long term. Neither blue collar workers nor workers with physically or psychologically demanding jobs benefit more from retirement than others.