Retirement Effects on Health in Europe

Abstract

What are the health impacts of retirement? As talk of raising retirement ages in pensions and social security schemes continues around the world, it is important to know both the costs and benefits for the individual, as well as the governments' budgets. In this paper we use the Survey of Health, Ageing and Retirement in Europe (SHARE) dataset to address this question in a multicountry setting. We use country-specific early and full retirement ages as instruments for retirement behavior. These statutory retirement ages clearly induce retirement, but are not related to an individual's health. Exploiting the discontinuities in retirement behavior across countries, we find significant evidence that retirement has a health-preserving effect on overall general health. Our estimates indicate that retirement leads to a 35 percent decrease in the probability of reporting to be in fair, bad, or very bad health, and an almost one standard deviation improvement in the health index. While the self-reported health seems to be a temporary impact, the health index indicates there are long-lasting health differences.

Is being in paid work beyond state pension age beneficial for health? Evidence from England using a life-course approach

“…6 Depending on the health outcome (eg, psychological or physical health), the study design and sample (eg, many earlier studies are based on non-representative occupational cohorts such as GAZEL and Whitehall), the country considered (USA or Europe), its timing, and the reasons given for leaving work (eg, voluntary, ill health, etc), retirement has been found to have beneficial, detrimental or no effects on health. [7][8][9][10][11][12][13][14][15] The evidence largely suggests that retirement is associated with an improvement in psychological health and wellbeing, 7-9 15 but results are less consistent for physical health. [9][10][11][12][13][14][15] However, working post-SPA is a relatively recent trend and so, until now, few studies have focused on the health consequences of continuing work past statutory retirement age while accounting for both health selection and labour market attachment prior to SPA.…”

“…[7][8][9][10][11][12][13][14][15] The evidence largely suggests that retirement is associated with an improvement in psychological health and wellbeing, 7-9 15 but results are less consistent for physical health. [9][10][11][12][13][14][15] However, working post-SPA is a relatively recent trend and so, until now, few studies have focused on the health consequences of continuing work past statutory retirement age while accounting for both health selection and labour market attachment prior to SPA. 6 For example, a report using the UK British Household Panel Survey suggests that those working beyond SPA report better self-rated health.…”

Physical Functioning in work and retirement: commentary on age-related trajectories of physical functioning in work and retirement —the role of sociodemographic factors, lifestyle and disease by Stenholmet al

“…In contrast, Coe and Zamarro defined as retired everyone not in the labour force, so they included homemakers, the sick and disabled, respondents separated from the labour force (not temporarily) and the unemployed (not temporarily), as well as the retired 20. These authors consider this to be a ‘cleaner’ measure of retirement behaviour when studying its effects on health because individuals “report that they are retired even when working full- or part-time, simply because they have left their ‘career’ job” (ref 21,.…”

“…In contrast, for example, Coe and Zamarro20 and Sahlgren94 studied individuals aged between 50 and 69 years. In turn, Kantarci and van Soest96 restricted their sample to respondents aged between 50 and 75 years.…”

“…In turn, Fe and Hollingsworth82 and Coe and Zamarro20 used a regression discontinuity approach within a panel model. The regression discontinuity models incorporate a threshold variable for the level at which the conditional distribution of the proportion of retirees by age and the age of the individuals and another discontinuity in the statistical relationship between their rates of change (ie, a discontinuity in the first derivative) –default retirement age would explain both this kink and jump 103…”