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Econ Hum Biol. 2019 Feb 15;33:116-123. doi: 10.1016/j.ehb.2019.01.009. [Epub ahead of print]

Retirement and Unexpected Health Shocks.

Author information

1
Paris School of Economics - CNRS, Paris, France. Electronic address: benedicte.apouey@psemail.eu.
2
Deakin University, Department of Economics, Australia. Electronic address: cahit.guven@deakin.edu.au.
3
Sorbonne University and Paris School of Economics, Paris, France. Electronic address: senik@pse.ens.fr.

Abstract

Is retirement good for your health? We complement previous studies by exploring the effect of retirement on unexpected health evolution. Using panel data from the Household, Income and Labour Dynamics in Australia survey (2001-2014), we construct measures of the mismatch between individual expected and actual health evolution (hereafter "health shocks"). In our approach, reverse causation running from health shocks to retirement is highly unlikely, because we look at shocks that happen after retirement, and those shocks are, by definition, unanticipated. We find that retirement decreases the probability of negative shocks (by approximately 16% to 24% for men and 14% to 23% for women) while increasing the likelihood of positive shocks (by 9% to 14% for men and 10% to 13% for women). This result is robust to the use of different lead-lag structures and of alternative measures of health change. Our findings are thus consistent with a positive impact of retirement on health.

KEYWORDS:

Australia; HILDA; Health Shocks; Life Satisfaction; Retirement

PMID:
30818179
DOI:
10.1016/j.ehb.2019.01.009

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