Chapter 7 Strategies to Retain Older Workers

Journal of Health Economics

Slavov

2014

Most government employees have access to retiree health coverage, which provides them with group health coverage even if they retire before Medicare eligibility. We study the impact of retiree health coverage on the labor supply of public sector workers between the ages of 55 and 64. We find that retiree health coverage raises the probability of stopping full time work by 4.3 percentage points (around 38 percent) over two years among public sector workers aged 55-59, and by 6.7 percentage points (around 26 percent) over two years among public sector workers aged 60-64. In the younger age group, retiree health insurance mostly seems to facilitate transitions to part-time work rather than full retirement. However, in the older age group, it increases the probability of stopping work entirely by 4.3 percentage points (around 22 percent).

Section: Prior Research On Health Insurance and Retirementmentioning

confidence: 99%

The role of retiree health insurance in the early retirement of public sector employees

Journal of Health Economics

Slavov

2014

Section: Prior Research On Health Insurance and Retirementmentioning

confidence: 99%

The Role of Retiree Health Insurance in the Early Retirement of Public Sector Employees

Slavov

2013

Most private sector workers with employer-provided health insurance have a strong incentive to continue working until Medicare eligibility in order to maintain group health coverage. However, most government employees have access to retiree health coverage, which allows them access to group health coverage even if they retire before Medicare eligibility. We study the impact of retiree health coverage on the probability of stopping work among public sector workers between the ages of 55 and 64. We find that, for state and local government employees, retiree health coverage raises the probability of stopping work by 5.1 percentage points (around 28 percent) between ages 60 and 64. However, we find no evidence that retiree health coverage influences state and local employees' decisions to stop work at ages 55-59, or that such coverage has an effect on the probability of stopping work for federal and military employees.

“…Madrian (1994) finds that retiree health coverage reduces the age of retirement by 5–16 months. Mulvey and Nyce (2004) use matched employer-employee administrative data to demonstrate that retiree health coverage is associated with a reduction in retirement ages of 9.3 months for men and 1.6 years for women. Marton and Woodbury (2012) find that retiree health coverage reduces retirement among workers in their early 50s (when they are generally ineligible for benefits) but raises among workers in their early 60s (when they are generally eligible).…”

Section: Prior Research On Health Insurance and Retirementmentioning

confidence: 99%

“…This allows us to control for the possibility that individuals may select into such jobs based on unobservable characteristics that also affect retirement behavior. Our dataset is similar to the one used by Mulvey and Nyce (2004), who also use administrative records from Watson Wyatt Worldwide (which merged with Towers Perrin in 2010 to form Towers Watson), although we control for additional individual and firm-specific characteristics relative to that study.…”

Section: Prior Research On Health Insurance and Retirementmentioning

confidence: 99%

Does retiree health insurance encourage early retirement?

Nyce¹,

Schieber²,

Journal of Public Economics

et al. 2013

Self Cite

The strong link between health insurance and employment in the United States may cause workers to delay retirement until they become eligible for Medicare at age 65. However, some employers extend health insurance benefits to their retirees, and individuals who are eligible for such retiree health benefits need not wait until age 65 to retire with group health coverage. We investigate the impact of retiree health insurance on early retirement using employee-level data from 54 diverse firms that are clients of Towers Watson, a leading benefits consulting firm. We find that retiree health coverage has its strongest effects at ages 62 through 64. Coverage that includes an employer contribution is associated with a 6.3 percentage point (36.2 percent) increase in the probability of turnover at age 62, a 7.7 percentage point (48.8 percent) increase in the probability of turnover at age 63, and a 5.5 percentage point (38.0 percent) increase in the probability of turnover at age 64. Conditional on working at age 57, such coverage reduces the expected retirement age by almost three months and reduces the total number of person-years worked between ages 58 and 64 by 5.6 percent.