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The Role of Retiree Health Insurance in the Employment Behavior of Older Men

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  • David M. Blau
  • Donna B. Gilleskie

Abstract

We model the employment and medical care decisions of older men who face health risk. The budget constraint incorporates detailed characteristics of health insurance as well as Social Security and private pensions. A man whose health insurance is tied to continued employment with his current employer faces the risk of large medical expenditures in the event of an adverse health shock if he retires before becoming eligible for Medicare at age 65. A man whose employer provides retiree health insurance or who has access to other health insurance not tied to his employment decision (e.g., from his wife) can retire before age 65 without consequences for his health insurance coverage. We use data from the Health and Retirement Survey to estimate the parameters of the model using structural methods. Simulations based on the estimates imply that changes in health insurance, including access and restrictions to retiree health insurance and Medicare have a modest impact on employment behavior among older males.

Suggested Citation

  • David M. Blau & Donna B. Gilleskie, 2003. "The Role of Retiree Health Insurance in the Employment Behavior of Older Men," NBER Working Papers 10100, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10100
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    References listed on IDEAS

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    1. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, vol. 59(1), pages 189-210, January.
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    6. Hurd, Michael D, 1989. "Mortality Risk and Bequests," Econometrica, Econometric Society, vol. 57(4), pages 779-813, July.
    7. Donna B. Gilleskie & David M. Blau, 2006. "Health insurance and retirement of married couples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 935-953.
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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • I1 - Health, Education, and Welfare - - Health

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