Healthy, Wealthy and Working: Retirement Decisions of Older New Zealanders
Health status is an important element in the decision to continue working or retire among older workers. Given the demographic projections for the next four decades, there will be increasing opportunities for older workers to remain in the workforce. However, an individual’s decision is likely to be influenced by both their health status and their accumulated wealth. This study analyses the influence of health and wealth on the decision to participate in the labour force amongst older New Zealanders, aged 55 to 70. It is based on the first wave of data collected in a longitudinal survey of Health, Work and Retirement conducted by researchers at Massey University. The study employs a range of measures of health including the results from the international Short Form (SF36), self-reported health status and the prevalence of chronic illness. Regardless of the measures tested, a significant reduction in labour force participation is associated with poorer health status. It is widely recognised that health status itself may partly be determined by labour market characteristics. Attempts to deal with this statistically were not successful. Perhaps surprisingly, wealth did not appear to be strongly related to the decision to retire. A marked fall in participation is associated with the receipt of New Zealand Superannuation at age 65, arguably masking the effect of privately held forms of retirement wealth. The paper reports associations between health, wealth and retirement which do not necessarily constitute evidence of causality.
|Date of creation:||Nov 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +64-4-472 2733
Fax: +64-4-473 0982
Web page: http://www.treasury.govt.nz
More information through EDIRC
References listed on IDEAS
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.:
- Kathryn H. Anderson & Richard V. Burkhauser, 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 315-330.
- Cai, Lixin, 2010.
"The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model,"
Elsevier, vol. 17(1), pages 77-90, January.
- Lixin Cai, 2007. "The Relationship between Health and Labour Force Participation: Evidence from a Panel Data Simultaneous Equation Model," Melbourne Institute Working Paper Series wp2007n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Lixin Cai & Guyonne Kalb, 2006. "Health status and labour force participation: evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 241-261.
- David Love & Paul A. Smith, 2008.
"Does Health Affect Portfolio Choice?,"
Department of Economics Working Papers
2008-11, Department of Economics, Williams College.
- Dhaval Dave & R. Inas Rashad & Jasmina Spasojevic, 2008.
"The Effects of Retirement on Physical and Mental Health Outcomes,"
Southern Economic Journal,
Southern Economic Association, vol. 75(2), pages 497-523, October.
- Dhaval Dave & Inas Rashad & Jasmina Spasojevic, 2006. "The Effects of Retirement on Physical and Mental Health Outcomes," NBER Working Papers 12123, National Bureau of Economic Research, Inc.
- repec:bla:restud:v:72:y:2005:i:2:p:395-427 is not listed on IDEAS
- Eric French, 2004.
"The Effects of Health, Wealth and Wages on Labor Supply and Retirement Behavior,"
2004 Meeting Papers
96, Society for Economic Dynamics.
- Eric French, 2005. "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 395-427.
- Eric French, 2000. "The effects of health, wealth, and wages on labor supply and retirement behavior," Working Paper Series WP-00-2, Federal Reserve Bank of Chicago.
- John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998.
"The Dynamic Effects of Health on the Labor Force Transitions of Older Workers,"
NBER Working Papers
6777, National Bureau of Economic Research, Inc.
- Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999. "The dynamic effects of health on the labor force transitions of older workers," Labour Economics, Elsevier, vol. 6(2), pages 179-202, June.
- Cobb-Clark, Deborah A. & Stillman, Steven, 2006.
"The Retirement Expectations of Middle-Aged Individuals,"
IZA Discussion Papers
2449, Institute for the Study of Labor (IZA).
- Deborah A. Cobb-Clark & Steve Stillman, 2006. "The Retirement Expectations of Middle-Aged Individuals," CEPR Discussion Papers 540, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Debra Sabatini Dwyer & Olivia S. Mitchell, 1998.
"Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?,"
NBER Working Papers
6503, National Bureau of Economic Research, Inc.
- Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, vol. 18(2), pages 173-193, April.
- Debra S. Dwyer & Olivia S. Mitchell, . "Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?," Pension Research Council Working Papers 98-7, Wharton School Pension Research Council, University of Pennsylvania.
- Lixin Cai & Guyonne Kalb, 2004. "Health Status and Labour Force Participation: Evidence from the HILDA Data," Melbourne Institute Working Paper Series wp2004n04, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Anderson, Kathryn H. & Burkhauser, Richard V., 1984. "The importance of the measure of health in empirical estimates of the labor supply of older men," Economics Letters, Elsevier, vol. 16(3-4), pages 375-380.
- Sarah Smith & James Banks, 2006.
"Retirement in the UK,"
The Centre for Market and Public Organisation
06/140, Department of Economics, University of Bristol, UK.
- Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
- Katherine Henderson & Grant M. Scobie, 2009. "Household Debt in New Zealand," Treasury Working Paper Series 09/03, New Zealand Treasury.
- Disney, Richard & Emmerson, Carl & Wakefield, Matthew, 2006.
"Ill health and retirement in Britain: A panel data-based analysis,"
Journal of Health Economics,
Elsevier, vol. 25(4), pages 621-649, July.
- Richard Disney & Carl Emmerson & Matthew Wakefield, 2003. "Ill health and retirement in Britain: a panel data based analysis," IFS Working Papers W03/02, Institute for Fiscal Studies.
- Mariacristina De Nardi & Eric French & John Bailey Jones, 2006.
"Differential Mortality, Uncertain Medical Expenses, and the Saving of Elderly Singles,"
2006 Meeting Papers
46, Society for Economic Dynamics.
- Mariacristina De Nardi & Eric French & John Bailey Jones, 2006. "Differential Mortality, Uncertain Medical Expenses, and the Saving of Elderly Singles," NBER Working Papers 12554, National Bureau of Economic Research, Inc.
- Mariacristina De Nardi & Eric French & John Bailey Jones, 2005. "Differential mortality, uncertain medical expenses, and the saving of elderly singles," Working Paper Series WP-05-13, Federal Reserve Bank of Chicago.
- Michael Baker & Mark Stabile & Catherine Deri, 2001.
"What do Self-Reported, Objective, Measures of Health Measure?,"
NBER Working Papers
8419, National Bureau of Economic Research, Inc.
- Michael Baker & Mark Stabile & Catherine Deri, 2004. "What Do Self-Reported, Objective, Measures of Health Measure?," Journal of Human Resources, University of Wisconsin Press, vol. 39(4).
- Ettner, Susan L., 1996. "New evidence on the relationship between income and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 67-85, February.
When requesting a correction, please mention this item's handle: RePEc:nzt:nztwps:10/02. 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: (Web and Publishing Team, The Treasury)
If references are entirely missing, you can add them using this form.