Life-cycle effects of health risk

Capatina, Elena

doi:10.1016/j.jmoneco.2015.06.002

Cited by 86 publications

(99 citation statements)

References 44 publications

(53 reference statements)

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“…Haan and Prowse (2014) construct and estimate a similar model for single German workers and use it to forecast how they will respond to increased longevity. In contrast to Capatina (2015), Haan and Prowse (2014) allow increases in longevity to be accompanied by increases in pension age thresholds and employment opportunities. The last modification is particularly important because their estimates show that job offer rates decrease rapidly and involuntary separations rise rapidly as workers approach the full public pension age.…”

Section: The Determination Of Healthmentioning

confidence: 96%

“…Eliminating the time cost of bad health would lead labor supply to increase by 3.3%. Capatina (2015) finds that removing the lifespan reductions associated with bad health would lead to large increases in saving, especially at older ages, but would have relatively little effect on labor supply. In Capatina's experiment, the incidence of bad health, and the productivity losses and time costs associated with it, remain at their baseline levels.…”

Section: The Determination Of Healthmentioning

confidence: 99%

“…Preferences. Bad health can raise the marginal utility of leisure relative to that consumption (Capatina, 2015). This is embodied in equation (2), where bad health reduces the agent's time endowment.…”

Section: How Health Affects Retirementmentioning

confidence: 99%

“…For example, French (2005) and Capatina (2015) consider four of the five channels but do not account for disability benefits. Kitao (2014a) accounts for DI, but uses very stylized models of demographic transitions and health insurance.…”

Section: How Health Affects Retirementmentioning

confidence: 99%

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Health, Health Insurance, and Retirement: A Survey

French¹,

Jones²

2017

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The degree to which retirement decisions are driven by health is a key concern for both academics and policymakers. In this paper we survey the economic literature on the health-retirement link in developed countries. We describe the mechanisms through which health affects labor supply and discuss how they interact with public pensions and public health insurance. The historical evidence suggests that health is not the primary source of variation in retirement across countries and over time.Furthermore, declining health with age can only explain a small share of the decline in employment near retirement age. Health considerations nonetheless play an important role, especially in explaining cross-sectional variation in employment and other outcomes within countries. We review the mechanisms through which health affects retirement and discuss recent empirical analyses.

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Section: The Determination Of Healthmentioning

confidence: 96%

Section: The Determination Of Healthmentioning

confidence: 99%

Section: How Health Affects Retirementmentioning

confidence: 99%

Section: How Health Affects Retirementmentioning

confidence: 99%

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Health, Health Insurance, and Retirement: A Survey

French¹,

Jones²

2017

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“…We find that the reform that maintains good risk-sharing in the employer-based pool while significantly reducing the tax expenditures consists of two steps: i) allowing the premiums in the employerbased market to be age-adjusted, and ii) giving tax subsidy only to those participants of the employer-based pool who currently have low medical spending. 3 Under this reform the spending on the tax subsidy constitutes only a third (34.6%) of the amount in the baseline economy and the tax rate decreases by one percentage point, while the take-up rate of the employer-based insurance slightly increases (97.1% comparing to 94.2% in the baseline). In contrast, if tax subsidy is completely eliminated the take-up rate goes down to 6.3%.…”

mentioning

confidence: 98%

Cross-Subsidization in Employer-Based Health Insurance and the Effects of Tax Subsidy Reform

Pashchenko¹,

Porapakkarm

2013

SSRN Journal

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A major source of insurance coverage for non-elderly adults in the US is employer-based health insurance market. Every participant of this market gets a tax subsidy since premiums are excluded from taxable income. However, people have different incentives to participate in the employer-based pool -since premiums are independent of individual risk, high-risk individuals receive implicit cross-subsidies from low-risk individuals. In this paper we explore several ways to reform the tax subsidy by taking this implicit cross-subsidization into account. We construct a general equilibrium heterogeneous agents model and calibrate it using the Medical Expenditure Panel Survey Dataset. We find that even though the complete elimination of the tax subsidy leads to the unraveling of the employer-based pool, there is still room for substantial savings by targeting the tax subsidy. More specifically, the same level of risk-sharing in the employer-based market can be achieved at one third of the current costs if i) the tax subsidy is targeted only towards low-risk people who have weak incentives to participate in the pool, and ii) employer-based insurance premiums become age-adjusted. To improve welfare outcome of this reform the tax subsidy should also be extended to low-income individuals.

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Retirement’s impact on health: what role does social network play?

Pilehvari

You

2023

Eur J Ageing

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While a large body of literature investigates the bidirectional relationship between retirement and health, few have analyzed the mechanism through which retirement affects health which will provide important policy instrument insights. Using three waves of National Social Life, Health, and Aging Project, we examine the mediating role of the social network in the relationship between retirement and health in USA. We address the endogeneity and reverse causality through panel instrumental fixed-effect methods. We apply both single and parallel mediation analyses to identify the potential mechanism by which social network characteristics mediate the impact of retirement on health. Findings reveal that retirement adversely affects physical and mental health outcomes, and a considerable portion of these effects are explained by social network changes post-retirement. Specifically, 58% of reduction in the probability of reporting good physical health and 4.5% of increment in chances of having depression symptoms post-retirement can be explained by shrinkage in the size of social network in retirees. Using parallel mediation identification to account for dependencies among social network features, we find that social network size induces 79.5% reduction in probability of reporting good physical health and 18.6% increase in probability of having depression in retirees as compared to non-retirees. Findings in this paper suggest that investing in social network of the elderly can buffer the adverse health effect of retirement and can be an effective policy target for promoting healthy aging.

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Life-cycle effects of health risk

Cited by 86 publications

References 44 publications

Health, Health Insurance, and Retirement: A Survey

Health, Health Insurance, and Retirement: A Survey

Cross-Subsidization in Employer-Based Health Insurance and the Effects of Tax Subsidy Reform

Retirement’s impact on health: what role does social network play?

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