Differentiating retirement age to compensate for health differences

Vincent Vandenberghe

IZA Journal of Labor Policy, 2021, vol. 11, issue 1, 34

Abstract: Population aging in Europe calls for an overall rise in the age of retirement. However, most observers agree that the latter should be differentiated to account for different individuals’ heterogeneous health when they grow older. This paper explores the relevance of this idea using the European Survey of Health, Ageing and Retirement in Europe (SHARE) panel data. It first quantifies the health gradient across and within each of the European countries across sociodemographic groups (i.e., Gender × Education) at typical retirement age. It then estimates the degree of retirement age differentiation that would be needed to equalize expected health at the moment of retirement. Results point at the need for a very high degree of differentiation to equalize expected health, both across and within, European countries. But the paper also shows that systematic retirement age differentiation would fail to match a significant portion of the full distribution of health status. In a world synonymous with systematic health-based retirement age differentiation, there would still be a lot of what health economists call F-mistakes ([F]ailure of treatment, i.e., no retirement for people in poor health) and E-mistakes ([E]xcessive treatment, i.e., people in good health going for retirement).

Keywords: aging; health; retirement policy; ex ante vs ex post egalitarianism (search for similar items in EconPapers)
JEL-codes: I1 J14 J26 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.2478/izajolp-2021-0002 (text/html)

Related works:
Working Paper: Differentiating Retirement Age to Compensate for Health Differences (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:izajlp:v:11:y:2021:i:1:p:34:n:6

DOI: 10.2478/izajolp-2021-0002

Access Statistics for this article

IZA Journal of Labor Policy is currently edited by Denis Fougère, Juan F. Jimeno and Núria Rodríguez-Planas

More articles in IZA Journal of Labor Policy from Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Bibliographic data for series maintained by Peter Golla ().