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Health, Pensions, and the Retirement Decision: Evidence from Canada

Tammy Schirle

Working Papers from Wilfrid Laurier University, Department of Economics

Abstract: Using longitudinal data from the Canadian Survey of Labour and Income Dynamics, I use an option value framework to examine the effects of health and employer provided pensions on retirement decisions. This study fills existing gaps in the literature by jointly modeling the impact of financial incentives and health on the retirement decisions of Canadians. The results indicate that both factors have substantial and significant effects on retirement, as having poor health increases the likelihood of entering retirement by up to 25 percentage points. Given the longitudinal aspect of the data, I am also able to address several identification issues discussed in the literature. The results corroborate previous evidence regarding the relative importance of attenuation and justification bias in self-reported health measures. The results also confirm U.S. and European evidence that employer-provided pensions and health are significant determinants of retirement.

Keywords: Retirement; Private Pensions; Health (search for similar items in EconPapers)
JEL-codes: I10 J26 (search for similar items in EconPapers)
Pages: 23
Date: 2007, Revised 2007
New Economics Papers: this item is included in nep-age, nep-hea and nep-lab
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