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Retirement effects on health in Europe

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  • Coe, Norma B.
  • Zamarro, Gema

Abstract

What are the health impacts of retirement? As talk of raising retirement ages in pensions and social security schemes continues around the world, it is important to know both the costs and benefits for the individual, as well as the governments' budgets. In this paper we use the Survey of Health, Ageing and Retirement in Europe (SHARE) dataset to address this question in a multi-country setting. We use country-specific early and full retirement ages as instruments for retirement behavior. These statutory retirement ages clearly induce retirement, but are not related to an individual's health. Exploiting the discontinuities in retirement behavior across countries, we find significant evidence that retirement has a health-preserving effect on overall general health. Our estimates indicate that retirement leads to a 35 percent decrease in the probability of reporting to be in fair, bad, or very bad health, and an almost one standard deviation improvement in the health index. While the self-reported health seems to be a temporary impact, the health index indicates there are long-lasting health differences.

Suggested Citation

  • Coe, Norma B. & Zamarro, Gema, 2011. "Retirement effects on health in Europe," Journal of Health Economics, Elsevier, vol. 30(1), pages 77-86, January.
  • Handle: RePEc:eee:jhecon:v:30:y:2011:i:1:p:77-86
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    More about this item

    Keywords

    Health Retirement Mental health;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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