The Role of Health in Retirement
This paper constructs and estimates a dynamic model of the evolution of health for those over the age of 50 and then embeds that model of health dynamics in a structural, econometric model of retirement and saving. The health model traces the effects of smoking, obesity, alcohol consumption, depression and other proclivities on medical conditions, including hypertension, diabetes, cancer, lung disease, heart problems, stroke, psychiatric problems and arthritis. These in turn influence an overall index of health status based on self-reported health, work limitations and ADLs, which is used to classify the population into good, fair, poor or terrible health. Compared to a situation where the entire population is in good health, the current health status of the population reduces the retirement age of the entire population by an average of about one year. While poor health or terrible health have a great impact on the disutility of work and thus on retirement, fair health as opposed to good health has a relatively minor effect. Smoking depresses full-time work effort by up to 3.5 percentage points by those in the early sixties, reducing the average retirement age by four to five months. Effects of trends in health care and health policies on retirement are also analyzed. Including detailed measurement of health dynamics in a retirement model improves understanding of the effects of health on retirement. It does not, however, influence estimates of the marginal effects of economic incentives on retirement.
|Date of creation:||Feb 2014|
|Date of revision:|
|Note:||AG HE LS PE|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James Marton & Stephen A. Woodbury, 2006.
"Retiree Health Benefits and Retirement,"
Upjohn Working Papers and Journal Articles
06-128, W.E. Upjohn Institute for Employment Research.
- Arie Kapteyn & Erik Meijer, 2013. "A Comparison of Different Measures of Health and their Relation to Labor Force Transitions at Older Ages," NBER Chapters, in: Discoveries in the Economics of Aging, pages 115-150 National Bureau of Economic Research, Inc.
- James Poterba & Steven Venti & David A. Wise, 2013.
"Health, Education, and the Postretirement Evolution of Household Assets,"
Journal of Human Capital,
University of Chicago Press, vol. 7(4), pages 297 - 339.
- James M. Poterba & Steven F. Venti & David A. Wise, 2013. "Health, Education, and the Post-Retirement Evolution of Household Assets," NBER Working Papers 18695, National Bureau of Economic Research, Inc.
- Gustman, Alan L. & Steinmeier, Thomas L., 2015.
"Effects of social security policies on benefit claiming, retirement and saving,"
Journal of Public Economics,
Elsevier, vol. 129(C), pages 51-62.
- Alan L. Gustman & Thomas L. Steinmeier, 2013. "Effects of Social Security Policies on Benefit Claiming, Retirement and Saving," NBER Working Papers 19071, National Bureau of Economic Research, Inc.
- Wilbert van der Klaauw & Kenneth I. Wolpin, 2005.
"Social Security and the Retirement and Savings Behavior of Low Income Households,"
PIER Working Paper Archive
05-020, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- van der Klaauw, Wilbert & Wolpin, Kenneth I., 2008. "Social security and the retirement and savings behavior of low-income households," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 21-42, July.
- Eric French & John Bailey Jones, 2004.
"The Effects of Health Insurance and Self-Insurance on Retirement Behavior,"
Working Papers, Center for Retirement Research at Boston College
wp2004-12, Center for Retirement Research, revised Apr 2004.
- Eric French & John Bailey Jones, 2011. "The Effects of Health Insurance and Self‐Insurance on Retirement Behavior," Econometrica, Econometric Society, vol. 79(3), pages 693-732, 05.
- Eric French and John Jones, 2001. "The Effects of Health Insurance and Self-Insurance on Retirement Behavior," Computing in Economics and Finance 2001 24, Society for Computational Economics.
- Eric French & John BaileyJones, 2007. "The Effects of Health Insurance and Self-Insurance on Retirement Behavior," Working Papers wp170, University of Michigan, Michigan Retirement Research Center.
- John Bailey Jones & Eric French, 2010. "The Effects of Health Insurance and Self-Insurance on Retirement Behavior," Discussion Papers 10-10, University at Albany, SUNY, Department of Economics.
- Eric French & John Bailey Jones, 2001. "The effects of health insurance and self-insurance on retirement behavior," Working Paper Series WP-01-19, Federal Reserve Bank of Chicago.
- R. Glenn Hubbard & Jonathan Skinner & Stephen P. Zeldes, 1994.
"Precautionary Saving and Social Insurance,"
NBER Working Papers
4884, National Bureau of Economic Research, Inc.
- Glenn R. Hubbard & Jonathan Skinner & Stephen P. Zeldes, . "Precautionary Saving and Social Insurance," Rodney L. White Center for Financial Research Working Papers 3-95, Wharton School Rodney L. White Center for Financial Research.
- Glenn R. Hubbard & Jonathan Skinner & Stephen P. Zeldes, . "Precautionary Saving and Social Insurance," Rodney L. White Center for Financial Research Working Papers 03-95, Wharton School Rodney L. White Center for Financial Research.
- Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
- James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:19902. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.