In Sickness and in Health: Retirement Responses to Spousal Health Shocks

Health shocks are a major driver of retirement. However, the existing literature on this topic tends not to consider the marital context in which retirements occur. Using the 1992-2022 Health and Retirement Study and staggered difference-in-differences methods, we investigate how spousal health shocks impact retirement transitions. We also investigate whether these effects differ by gender and health insurance status. We consider multiple definitions of health shocks, including self-reported health declines, additional diagnoses, hospitalizations, increases in out-of-pocket medical spending, and functional deterioration. Our results suggest that the probability of retirement increases by 1.2 to 1.3 percentage points (12 to 13 percent) after a spouse’s new health condition diagnosis or hospitalization. These retirements tend to occur earlier than anticipated. They also tend to be concentrated among women and respondents with employment-based health plans that include retiree coverage for their spouse.