Working Paper: NBER ID: w21326
Authors: Aspen Gorry; Devon Gorry; Sita Slavov
Abstract: We utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization. Because poor health can induce retirement, we instrument for retirement using eligibility for Social Security and employer sponsored pensions and coverage by the Social Security earnings test. We find strong evidence that retirement improves both health and life satisfaction. While the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up 4 or more years later, consistent with the view that health is a stock that evolves slowly. We find little evidence that retirement influences health care utilization.
Keywords: retirement; health; life satisfaction; health care utilization
JEL Codes: I10; I31; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| retirement (J26) | self-reported health (I10) |
| retirement (J26) | life satisfaction (I31) |
| retirement (J26) | objective health measures (I14) |
| retirement (J26) | health care utilization (I11) |
| retirement (J26) | public health care expenditures (H51) |