No “Honeymoon Phase” Whose health benefits from retirement and when
Birgit Leimer ()
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Birgit Leimer: Johannes Gutenberg-University Mainz, Germany
No 1718, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz
I use a ﬁxed effects instrumental variable approach to determine the effect retirement has on health. The exogenous variation in the probability to retire at the normal and early retirement age thresholds is exploited to instrument for the otherwise endogenous retirement decision. Six health aspects are considered: self-assessed health, depression, limitations in (instrumental) activities of daily living, mobility limitations, grip strength and number of words recalled. Using data for 10 countries from the Survey of Health, Retirement and Ageing in Europe (SHARE), I ﬁnd that retiring both at the normal and early retirement eligibility ages signiﬁcantly improves all health aspects, including the objective measure grip strength. Results do not generally support the theory that previous research was biased towards zero due to behavioral changes during the anticipation phase prior to retirement. Results also do not show the presence of a honeymoon phase directly following the start of retirement, in which individuals are believed to experience a euphoric state leading health improvements. It appears that individuals, especially blue collar workers, go through an adjustment period after retirement in which they experience more health problems, before stabilizing and improving. Overall, retirement has a health preserving effect for both genders and all occupations in the long term. Neither blue collar workers nor workers with physically or psychologically demanding jobs benfit more from retirement than others.
Keywords: retirement; health; honeymoon; retirement phases; SHARE; ﬁxed effects; instrumental variables (search for similar items in EconPapers)
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