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Retiree Health Benefits and Retirement

Author

Listed:
  • James Marton

    (University of Kentucky)

  • Stephen A. Woodbury

    () (Michigan State University and W.E. Upjohn Institute for Employment Research)

Abstract

Employer-provided health benefit coverage for workers who retire before age 65 has fallen over the last decade. We examine a cohort of male workers from the Health and Retirement Survey to examine questions about the dynamics of retiree health benefits and the relationship between retiree health benefits and retirement behavior, which is important for the debate over increasing health coverage for older Americans without reducing work incentives. On dynamics, we find that between 1992 and 1996, 24 percent of full-time workers who had retiree health benefits lost their coverage, while 15 percent of full-time workers who lacked coverage gained it. Also, of the full-time employed men who were covered by retiree health benefits in 1992 and had retired by 1996, 3 percent were uninsured, and 15 percent were covered by health insurance other than employer-provided insurance. On the relationship between retiree health benefits and retirement, we find that workers with retiree benefits were 29 to 55 percent more likely to retire than those without. We also find that workers who are eligible for retiree health benefits tend to take advantage of them when they are relatively young.

Suggested Citation

  • 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.
  • Handle: RePEc:upj:weupjo:06-128
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    References listed on IDEAS

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    Cited by:

    1. Byron Lutz & Louise Sheiner, 2014. "The Fiscal Stress Arising from State and Local Retiree Health Obligations," NBER Working Papers 19779, National Bureau of Economic Research, Inc.
    2. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2016. "The Affordable Care Act as Retiree Health Insurance: Implications for Retirement and Social Security Claiming," Working Papers wp343, University of Michigan, Michigan Retirement Research Center.
    3. 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.
    4. Alan L. Gustman & Thomas L. Steinmeier, 2014. "The Role of Health in Retirement," NBER Working Papers 19902, National Bureau of Economic Research, Inc.
    5. Robert L. Clark & Melinda Sandler Morrill, 2010. "Retiree Health Plans in the Public Sector," Books, Edward Elgar Publishing, number 13688.
    6. Christina Robinson & Robert Clark, 2010. "Retiree Health Insurance and Disengagement from a Career Job," Journal of Labor Research, Springer, vol. 31(3), pages 247-262, September.
    7. Nyce, Steven & Schieber, Sylvester J. & Shoven, John B. & Slavov, Sita Nataraj & Wise, David A., 2013. "Does retiree health insurance encourage early retirement?," Journal of Public Economics, Elsevier, vol. 104(C), pages 40-51.

    More about this item

    Keywords

    Marton; Woodbury; health insurance; employee benefits; retirement; elderly; employment; retiree health benefits;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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