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Fatal Attraction? Extended Unemployment Benefits, Labor Force Exits, and Mortality

Andreas Kuhn, Stefan Staubli, Jean-Philippe Wuellrich and Josef Zweimüller

No 13217, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We estimate the causal effect of permanent and premature exits from the labor force on mortality. To overcome the problem of negative health selection into early retirement, we exploit a policy change in unemployment insurance rules in Austria that allowed workers in eligible regions to exit the labor force 3 years earlier compared to workers in non-eligible regions. Using administrative data with precise information on mortality and retirement, we find that the policy change induced eligible workers to exit the labor force significantly earlier. Instrumental variable estimation results show that for men retiring one year earlier causes a 6.8% increase in the risk of premature death and 0.2 years reduction in the age at death, but has no significant effect for women.

Keywords: early retirement; health behavior; Instrumental Variable; Mortality (search for similar items in EconPapers)
JEL-codes: I10 I12 J14 J26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-eur and nep-lab
Date: 2018-10
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