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The Health Consequences of Retirement

  • Michael Insler


    (United States Naval Academy)

This paper examines the impact of retirement on individuals' health. Declines in health commonly compel workers to retire, so the challenge is to disentangle the simultaneous causal effects. The estimation strategy employs an instrumental variables specification. The instrument is based on workers' self-reported probabilities of working past ages 62 and 65, taken from the first period in which they are observed. Results indicate that the retirement effect on health is beneficial and significant. Investigation into behavioral data, such as smoking and exercise, suggests that retirement may affect health through such channels; with additional leisure time, many retirees practice healthier habits.

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Paper provided by United States Naval Academy Department of Economics in its series Departmental Working Papers with number 43.

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Length: 63 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:usn:usnawp:43
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  1. 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.
  2. Christopher J. Ruhm, 1996. "Are Recessions Good For Your Health?," NBER Working Papers 5570, National Bureau of Economic Research, Inc.
  3. Thomas C. Buchmueller & Robert G. Valletta, 1996. "The effect of health insurance on married female labor supply," Working Papers in Applied Economic Theory 96-09, Federal Reserve Bank of San Francisco.
  4. Craig A. Olson, 1998. "A comparison of parametric and semiparametric estimates of the effect of spousal health insurance coverage on weekly hours worked by wives," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(5), pages 543-565.
  5. John Rust & Christopher Phelan, 1994. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Public Economics 9406005, EconWPA, revised 06 Jul 1994.
  6. Hendrik Jürges, 2006. "True health vs. response styles: Exploring cross-country differences in self-reported health," MEA discussion paper series 06105, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  7. 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.
  8. Kathleen McGarry, 2002. "Health and Retirement: Do Changes in Health Affect Retirement Expectations?," NBER Working Papers 9317, National Bureau of Economic Research, Inc.
  9. John Bound & Timothy Waidmann, 2007. "Estimating the Health Effects of Retirements," Working Papers wp168, University of Michigan, Michigan Retirement Research Center.
  10. Norma B. Coe & Gema Zamarro, 2008. "Retirement Effects on Health in Europe," Working Papers 588, RAND Corporation.
  11. 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.
  12. 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.
  13. Courtney Coile & Jonathan Gruber, 2007. "Future Social Security Entitlements and the Retirement Decision," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 234-246, May.
  14. Samwick, Andrew A., 1998. "New evidence on pensions, social security, and the timing of retirement," Journal of Public Economics, Elsevier, vol. 70(2), pages 207-236, November.
  15. Gloria J. Bazzoli, 1985. "The Early Retirement Decision: New Empirical Evidence on the Influence of Health," Journal of Human Resources, University of Wisconsin Press, vol. 20(2), pages 214-234.
  16. Kevin Neuman, 2008. "Quit Your Job and Get Healthier? The Effect of Retirement on Health," Journal of Labor Research, Springer, vol. 29(2), pages 177-201, June.
  17. Susann Rohwedder, 2009. "Mental Retirement," Working Papers 711, RAND Corporation.
  18. 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.
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