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Retirement and Unexpected Health Shocks

Author

Listed:
  • Apouey, Bénédicte H.
  • Guven, Cahit
  • Senik, Claudia
Abstract
Do people form correct expectations about the impact of retirement on their health? This paper looks at unexpected health shocks that hit people after they retire. Using data from the Household, Income and Labour Dynamics in Australia survey (waves 2001-2014), we construct measures of unexpected health shocks for each year, using information on respondents’ views about the expected and past evolution of their health status. By definition, unexpected health shocks are immune to the problem of reverse causality (running from health condition to retirement). Our findings indicate that retirement increases the likelihood of positive health shocks and decreases the probability of negative shocks for men, with no clear results for women. These shocks are mirrored by variations in life satisfaction of the same nature (e.g. increased life satisfaction in case of unexpected positive health shocks). Other indicators of mental and physical health taken from the SF-36 vary in the same way, i.e. improve unexpectedly after retirement for men. These findings suggest that, at least in the case of men, people’s desire to retire may not be based on perfectly correct expectations about the impact of this move, but is aligned with its actual consequence: retirement exerts a positive causal impact on health.

Suggested Citation

  • Apouey, Bénédicte H. & Guven, Cahit & Senik, Claudia, 2017. "Retirement and Unexpected Health Shocks," CEPREMAP Working Papers (Docweb) 1708, CEPREMAP.
    • Handle: RePEc:cpm:docweb:1708
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    Cited by:

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    2. Bénédicte Apouey, 2020. "Conditions of Existence and Subjective Perceptions of Retirement: Quantitative Evidence from France," Working Papers halshs-02908456, HAL.
    3. Anita Abramowska-Kmon & Wojciech Łątkowski, 2021. "The Impact of Retirement on Happiness and Loneliness in Poland—Evidence from Panel Data," IJERPH, MDPI, vol. 18(18), pages 1-15, September.
    4. Lawrence C. Pellegrini & Kimberley H. Geissler, 2019. "Supplemental Security Income enrollment and health care and social assistance employment and wages," International Journal of Health Planning and Management, Wiley Blackwell, vol. 34(4), pages 1319-1332, October.
    5. Mattia Filomena & Matteo Picchio, 2023. "Retirement and health outcomes in a meta‐analytical framework," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1120-1155, September.
    6. Andrew E Clark & Rong Zhu, 2024. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," The Economic Journal, Royal Economic Society, vol. 134(660), pages 1465-1493.
    7. Bénédicte Apouey, 2020. "Conditions of Existence and Subjective Perceptions of Retirement: Quantitative Evidence from France," PSE Working Papers halshs-02908456, HAL.

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    More about this item

    Keywords

    Australia; HILDA; Health; Retirement; Health Shocks; Life Satisfaction;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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