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SeaTE: Subjective Ex Ante Treatment Effect of Health on Retirement

Author

Listed:
  • Pamela Giustinelli
  • Matthew D. Shapiro

Abstract

The paper studies the effect of health on work among older workers by eliciting two- and four-year-ahead subjective probabilities of working under alternative health states. These measures predict work outcomes. Person-specific differences in working probabilities across health states can be interpreted as Subjective ex ante Treatment Effects (SeaTEs) in a potential outcomes framework and as taste for work within a discrete choice dynamic programming framework. There is substantial heterogeneity in expectations of work conditional on health. The paper shows how heterogeneity in taste for work correlated with health can bias regression estimates of the effect of health on retirement.

Suggested Citation

  • Pamela Giustinelli & Matthew D. Shapiro, 2024. "SeaTE: Subjective Ex Ante Treatment Effect of Health on Retirement," American Economic Journal: Applied Economics, American Economic Association, vol. 16(2), pages 278-317, April.
    • Handle: RePEc:aea:aejapp:v:16:y:2024:i:2:p:278-317
    DOI: 10.1257/app.20210316
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    Cited by:

    1. Francesco Andreoli & Claudine Kirsch & Eugenio Peluso & Vincenzo Prete, 2024. "The subjective treatment effects of COVID-19 on child well-being: evidence from Luxembourg," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 71(3), pages 575-596, September.
    2. Delavande, Adeline & Del Bono, Emilia & Holford, Angus, 2025. "Imprecise health beliefs and health behavior," Journal of Health Economics, Elsevier, vol. 102(C).
    3. Gizem Koşar & Cormac O'Dea, 2022. "Expectations Data in Structural Microeconomic Models," NBER Working Papers 30094, National Bureau of Economic Research, Inc.
    4. Yifan Gong & Todd Stinebrickner & Ralph Stinebrickner, 2020. "Perceived and actual option values of college enrollment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 35(7), pages 940-959, November.
    5. Favara, Marta & Freund, Richard & Perez-Alvarez, Marcello, 2023. "What If It Never Happened? Subjective Treatment Effects of a Negative Shock on Youth Labour Market Outcomes in Developing Countries," IZA Discussion Papers 16417, Institute of Labor Economics (IZA).
    6. Gong, Yifan & Stinebrickner, Ralph & Stinebrickner, Todd, 2022. "Marriage, children, and labor supply: Beliefs and outcomes," Journal of Econometrics, Elsevier, vol. 231(1), pages 148-164.
    7. Gabriella Conti & Pamela Giustinelli, 2025. "For Better or Worse? Subjective Expectations and Cost‐Benefit Trade‐Offs in Health Behavior: An Application to Lockdown Compliance in the United Kingdom," Health Economics, John Wiley & Sons, Ltd., vol. 34(5), pages 992-1012, May.
    8. Ye, Xiaoyang & Zhai, Muxin & Feng, Li & Xie, A’na & Wang, Weimin & Wu, Hongbin, 2022. "Still want to be a doctor? Medical student dropout in the era of COVID-19," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 122-139.
    9. Aucejo, Esteban M. & French, Jacob & Ugalde Araya, Maria Paola & Zafar, Basit, 2020. "The impact of COVID-19 on student experiences and expectations: Evidence from a survey," Journal of Public Economics, Elsevier, vol. 191(C).
    10. Daniel Kaliski, 2025. "Household debt, self-insurance, and subjective medical expenses risk," Empirical Economics, Springer, vol. 68(3), pages 1191-1231, March.
    11. Stephane Bonhomme & Angela Denis, 2023. "Estimating Individual Responses when Tomorrow Matters," Papers 2310.09105, arXiv.org, revised Oct 2025.
    12. Yifan Gong & Todd Stinebrickner & Ralph Stinebrickner & Yuxi Yao, 2025. "The Role of Nonpecuniary Considerations: Location Decisions of College Graduates From Low‐Income Backgrounds," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 66(2), pages 903-931, May.
    13. Romuald Meango & Marc Henry & Ismael Mourifie, 2025. "Combining stated and revealed preferences," Papers 2507.13552, arXiv.org, revised Nov 2025.
    14. Joseph S. Briggs & Andrew Caplin & Søren Leth-Petersen & Christopher Tonetti, 2024. "Identification of Marginal Treatment Effects using Subjective Expectations," NBER Working Papers 32309, National Bureau of Economic Research, Inc.
    15. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.

    More about this item

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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