Spillover Effects of Retirement: does health vulnerability matter?

Dominic Byrne (), Do Won Kwak (), Kam Ki Tang and Myra Yazbeck ()
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Dominic Byrne: School of Economics, University of Queensland

No 643, Discussion Papers Series from University of Queensland, School of Economics

Abstract: The current literature investigating the impact of retirement and the associated spousal spillover effects overlooks the unintended effects of retirement on spouses in vulnerable health, namely spouses with long-term health conditions. In this paper, we fill this gap in the literature and investigate the impact of an individual’s retirement on their partner’s health outcomes when their partner has long-term health conditions. Given the inherent identification challenges associated with entry into retirement, we exploit an exogenous variation of pension-qualifying age in Australia. Using this exogenous variation as an instrument and data from the Household Income and Labour Dynamics in Australia survey, we find that the husband’s retirement has a positive impact on the wife’s quality adjusted life years (QALY) and other physical and mental health outcomes. Drawing upon the literature on QALY and cost-effectiveness thresholds, we estimate that the dollar value of the husband-to-wife spillovers could be worth somewhere between AUD7,000 and AUD21,000. We also identify redistribution of domestic workload as a key transmission mechanism of the spousal spillover effects. Women with LTHCs will see their QALY and health improves only if their husband devotes more time to domestic tasks after retirement.

Keywords: Spillovers; Retirement; Long-term Health Conditions; QALY (search for similar items in EconPapers)
JEL-codes: I19 I31 (search for similar items in EconPapers)
Date: 2021-04-28
New Economics Papers: this item is included in nep-age and nep-hea
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https://economics.uq.edu.au/files/39741/643.pdf (application/pdf)

Related works:
Journal Article: Spillover effects of retirement: Does health vulnerability matter? (2023)
Working Paper: Spillover Effects of Retirement: does health vulnerability matter? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:643

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