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Employer Provided Health Insurance and Retirement Behavior

Author

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  • Alan L. Gustman
  • Thomas L. Steinmeier

Abstract

This paper analyzes the effects on retirement of employer provided health benefits to workers and retirees. Retiree health benefits delay retirement until age of eligibility, and then accelerate it. With a base case of no retiree health coverage, granting retiree health coverage to all those with employer coverage while working accelerates retirement age by less than one month. Valuing benefits at costs of private health insurance to unaffiliated individuals, rather than at group rates, increases the effect. Ignoring retiree health benefits in retirement models creates only a small bias. Changing health insurance policies has a small effect on retirement.

Suggested Citation

  • Alan L. Gustman & Thomas L. Steinmeier, 1993. "Employer Provided Health Insurance and Retirement Behavior," NBER Working Papers 4307, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:4307
    Note: LS AG
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    References listed on IDEAS

    as
    1. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, vol. 59(1), pages 189-210, January.
    2. Gustman, Alan L & Steinmeier, Thomas L, 1986. "A Structural Retirement Model," Econometrica, Econometric Society, vol. 54(3), pages 555-584, May.
    3. Alan L. Gustman & Thomas L. Steinmeier, 1991. "Changing the Social Security Rules for Work after 65," ILR Review, Cornell University, ILR School, vol. 44(4), pages 733-745, July.
    4. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1992. "Three Models of Retirement: Computational Complexity versus Predictive Validity," NBER Chapters,in: Topics in the Economics of Aging, pages 21-60 National Bureau of Economic Research, Inc.
    5. Gustman, Alan L & Steinmeier, Thomas L, 1986. "A Disaggregated, Structural Analysis of Retirement by Race, Difficulty of Work and Health," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 509-513, August.
    6. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1992. "Pension Plan Provisions and Retirement: Men & Women, Medicare, and Models," NBER Working Papers 4201, National Bureau of Economic Research, Inc.
    7. Joseph F. Quinn & Richard V. Burkhauser & Daniel A. Myers, 1990. "Passing the Torch: The Influence of Economic Incentives on Work and Retirement," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number pt, November.
    8. Lumsdaine, Robin L. & Stock, James H. & Wise, David A., 1990. "Efficient windows and labor force reduction," Journal of Public Economics, Elsevier, vol. 43(2), pages 131-159, November.
    9. Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Maria Casanova-Rivas, 2008. "Dynamic Complementarities: A Computational and Empirical Analysis of Couples' Retirement Decisions," 2008 Meeting Papers 1073, Society for Economic Dynamics.
    2. Jonathan Gruber & Brigitte C. Madrian, 2002. "Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature," JCPR Working Papers 255, Northwestern University/University of Chicago Joint Center for Poverty Research.
    3. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1996. "Why Are Retirement Rates So High at Age 65?," NBER Chapters,in: Advances in the Economics of Aging, pages 61-82 National Bureau of Economic Research, Inc.
    4. Brigitte C. Madrian & Nancy Beaulieu, 1998. "Does Medicare Eligibility Affect Retirement?," NBER Chapters,in: Inquiries in the Economics of Aging, pages 109-131 National Bureau of Economic Research, Inc.
    5. Shoven, John B. & Slavov, Sita Nataraj, 2014. "The role of retiree health insurance in the early retirement of public sector employees," Journal of Health Economics, Elsevier, vol. 38(C), pages 99-108.
    6. Jonathan Gruber, 1998. "Health Insurance and the Labor Market," NBER Working Papers 6762, National Bureau of Economic Research, Inc.
    7. Robin L. Lumsdaine, 1995. "Factors Affecting Labor Supply Decisions and Retirement Income," NBER Working Papers 5223, National Bureau of Economic Research, Inc.
    8. Clark, Robert L. & Mitchell, Olivia S., 2014. "How does retiree health insurance influence public sector employee saving?," Journal of Health Economics, Elsevier, vol. 38(C), pages 109-118.
    9. John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, vol. 65(4), pages 781-832, July.
    10. Fitzpatrick, Maria D., 2014. "Retiree health insurance for public school employees: Does it affect retirement?," Journal of Health Economics, Elsevier, vol. 38(C), pages 88-98.
    11. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2016. "The Affordable Care Act as Retiree Health Insurance: Implications for Retirement and Social Security Claiming," NBER Working Papers 22815, National Bureau of Economic Research, Inc.
    12. Joshua Congdon-Hohman, 2006. "The Impact of Health Insurance Availability on Retirement Decision Reversals," Working Papers wp137, University of Michigan, Michigan Retirement Research Center.
    13. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    14. Helen Levy & Thomas Buchmueller & Sayeh Nikpay, 2015. "The Effect of Health Reform on Retirement," Working Papers wp329, University of Michigan, Michigan Retirement Research Center.
    15. repec:eee:labchp:v:3:y:1999:i:pc:p:3261-3307 is not listed on IDEAS
    16. repec:eee:hapoch:v1_457 is not listed on IDEAS
    17. Brown, Kristine M., 2013. "The link between pensions and retirement timing: Lessons from California teachers," Journal of Public Economics, Elsevier, vol. 98(C), pages 1-14.
    18. Patricia H Born & Alice M Zawacki, 2003. "Manufacturing Firms' Decisions Regarding Retiree Health Insurance," Working Papers 03-14, Center for Economic Studies, U.S. Census Bureau.
    19. Joseph F. Quinn, 1999. "The Labour Market, Retirement, and Disability," Boston College Working Papers in Economics 420, Boston College Department of Economics.

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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