The Causal Effect of Retirement on Health: Understanding the Mechanisms

Dai Binh Tran and Vasileios Zikos

Australian Economic Review, 2019, vol. 52, issue 4, 427-446

Abstract: This article examines the direct effects of retirement on health, as well as its indirect effects, through a mediation analysis. Using Australian panel data, analysis reveals that changes in retirement status and retirement duration imply positive causal effects on self‐assessed health as well as physical health and mental health. Gender plays an important role in shaping these relationships. For women, the positive relationship between retirement duration and health can be attributed to physical activity. In contrast, men appear to enjoy better health when staying retired for longer because they participate more in outdoor activities.

Date: 2019
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