Working Paper: NBER ID: w25124
Authors: Andreas Kuhn; Stefan Staubli; Jean-Philippe Wuellrich; Josef Zweimüller
Abstract: We estimate the causal effect of permanent and premature exits from the labor force on mortality. To overcome the problem of negative health selection into early retirement, we exploit a policy change in unemployment insurance rules in Austria that allowed workers in eligible regions to exit the labor force 3 years earlier compared to workers in non-eligible regions. Using administrative data with precise information on mortality and retirement, we find that the policy change induced eligible workers to exit the labor force significantly earlier. Instrumental variable estimation results show that for men retiring one year earlier causes a 6.8% increase in the risk of premature death and 0.2 years reduction in the age at death, but has no significant effect for women.
Keywords: Unemployment Benefits; Labor Force Exits; Mortality
JEL Codes: I10; I12; J14; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| earlier exit from the labor force (J26) | mortality among men (I12) |
| each additional year of early retirement (J26) | average age at death for men (J26) |
| early retirement (J26) | significant health effects for women (I12) |
| early retirement (J26) | increased mortality for men in blue-collar occupations (J28) |
| early retirement (J26) | increased mortality for men with low work experience (J17) |
| early retirement (J26) | increased mortality for men with preexisting health impairments (I12) |
| IV estimates < OLS estimates (C26) | selection bias based on health status (I12) |