Revisiting the Effects of Health on Retirement: Event Study Evidence from Expectations Data

How does health affect the timing of retirement? We revisit this question using data from the Health and Retirement Study and an event study framework to estimate the causal effects of various health shocks on retirement expectations. Importantly, the more-recent survey data contain information on expectations for current workers and non-workers, which avoids sample selection issues. We find that declines in subjective health status and new diagnoses of objective health conditions decrease the probabilities of working past 62 and 65. Our findings highlight how poor health can cause people to retire before becoming eligible for Social Security and Medicare benefits.