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Spillover Effects of Retirement: does health vulnerability matter?

Author

Listed:
  • Dominic Byrne

    (School of Economics, University of Queensland)

  • Do Won Kwak

    (Graduate School of International Studies, Korea University, Seoul, Korea)

  • Kam Ki Tang

    (School of Economics, University of Queensland, Australia)

  • Myra Yazbeck

    (Department of Economics, University of Ottawa, Canada; School of Economics, University of Queensland)

Abstract

The current literature investigating the impact of retirement and the associated spousal spillover effects overlooks the unintended effects of retirement on spouses in vulnerable health, namely spouses with long-term health conditions. In this paper, we fill this gap in the literature and investigate the impact of an individual’s retirement on their partner’s health outcomes when their partners have long-term health conditions. Given the inherent identification challenges associated with entry into retirement, we exploit an exogenous variation to pension-qualifying age in Australia. Using a Fuzzy Regression Discontinuity Design and data from the Household Income and Labour Dynamics in Australia survey, we find that the retirement of the husband has a positive impact on the wife’s Quality Adjusted Life Years (QALY) and other physical and mental health outcomes. Drawing upon the literature on QALY and cost-effectiveness thresholds, we estimate that the dollar value of the husband-to-wife spillovers could be worth somewhere between AUD8,354 and AUD25,062.

Suggested Citation

  • Dominic Byrne & Do Won Kwak & Kam Ki Tang & Myra Yazbeck, 2020. "Spillover Effects of Retirement: does health vulnerability matter?," Discussion Papers Series 620, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:620
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    File URL: https://economics.uq.edu.au/files/39636/620.pdf
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    More about this item

    Keywords

    Spillovers; Retirement; Long-term Health Conditions; Regression Discontinuity Design;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I19 - Health, Education, and Welfare - - Health - - - Other

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