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Retirement and healthcare utilization

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  • Frimmel, Wolfgang
  • Pruckner, Gerald

Abstract

Pension systems and their reforms are often discussed in the context of financial viability. These debates grow in intensity with the aging of the population in industrialized countries. However, an increase in retirement age may create unintended side effects for retirees' health or healthcare costs. This paper empirically analyzes the effect of (early) retirement on individual inpatient and outpatient healthcare expenditure in Austria. We use comprehensive labor market and retirement data from the Austrian Social Security Database combined with detailed information about individual inpatient and outpatient healthcare service utilization for the province of Upper Austria. To account for the endogeneity in retirement decisions, we exploit exogenous variation in the early retirement age induced by two Austrian pension reforms in 2000 and 2003. We find significant negative effects of retirement on healthcare expenditure. For both sexes, retirement decreases subsequent expenditure for outpatient medical attendance and hospitalization. Analyses of disaggregated components of healthcare expenditure confirm a positive health effect caused by physical and emotional relief after retirement. Apart from direct health effects, the results also reveal behavioral changes in the utilization of healthcare services. These changes in health behavior seem in particular relevant for blue collar workers.

Suggested Citation

  • Frimmel, Wolfgang & Pruckner, Gerald, 2018. "Retirement and healthcare utilization," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181546, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc18:181546
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    Cited by:

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    2. Elsa Perdrix, 2021. "Does later retirement change your healthcare consumption ? Evidence from France," PSE Working Papers halshs-02904339, HAL.
    3. Eibich, Peter & Goldzahl, Léontine, 2021. "Does retirement affect secondary preventive care use? Evidence from breast cancer screening," Economics & Human Biology, Elsevier, vol. 43(C).
    4. Manuel Serrano‐Alarcón & Chiara Ardito & Roberto Leombruni & Alexander Kentikelenis & Angelo d’Errico & Anna Odone & Giuseppe Costa & David Stuckler & IWGRH, 2023. "Health and labor market effects of an unanticipated rise in retirement age. Evidence from the 2012 Italian pension reform," Health Economics, John Wiley & Sons, Ltd., vol. 32(12), pages 2745-2767, December.
    5. Mattia Filomena & Matteo Picchio, 2023. "Retirement and health outcomes in a meta‐analytical framework," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1120-1155, September.
    6. Zhaoxue Ci, 2022. "Does raising retirement age lead to a healthier transition to retirement? Evidence from the U.S. Social Security Amendments of 1983," Health Economics, John Wiley & Sons, Ltd., vol. 31(10), pages 2229-2243, October.
    7. Li, Yao & Li, Lei & Liu, Junxia, 2023. "The efficient moral hazard effect of health insurance: Evidence from the consolidation of urban and rural resident health insurance in China," Social Science & Medicine, Elsevier, vol. 324(C).
    8. Nguyen, Ha Trong & Mitrou, Francis & Taylor, Catherine L. & Zubrick, Stephen R., 2020. "Does retirement lead to life satisfaction? Causal evidence from fixed effect instrumental variable models," GLO Discussion Paper Series 536, Global Labor Organization (GLO).
    9. Barschkett, Mara & Geyer, Johannes & Haan, Peter & Hammerschmid, Anna, 2022. "The effects of an increase in the retirement age on health — Evidence from administrative data," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    10. Zhu, Rong, 2021. "Retirement and voluntary work provision: Evidence from the Australian Age Pension reform," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 674-690.
    11. Clémentine Garrouste & Elsa Perdrix, 2022. "Is there a consensus on the health consequences of retirement? A literature review," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 841-879, September.
    12. Nguyen, Ha Trong & Mitrou, Francis & Zubrick, Stephen R., 2021. "Retirement, housing mobility, downsizing and neighbourhood quality - A causal investigation," GLO Discussion Paper Series 882, Global Labor Organization (GLO).
    13. Elsa Perdrix, 2021. "Does later retirement change your healthcare consumption ? Evidence from France," Working Papers halshs-02904339, HAL.
    14. Anikó Bíró & Réka Branyiczki & Péter Elek, 2022. "The effect of involuntary retirement on healthcare use," Health Economics, John Wiley & Sons, Ltd., vol. 31(6), pages 1012-1032, June.

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    More about this item

    Keywords

    retirement; healthcare expenditure; health behavior; instrumental variable;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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