Does retirement improve health and life satisfaction?

TitleDoes retirement improve health and life satisfaction?
Publication TypeJournal Article
Year of Publication2018
AuthorsGorry, A, Gorry, D, Slavov, SNataraj
JournalHealth Economics
ISSN Number1099-1050
KeywordsLife Satisfaction, Optimism, Retirement Planning and Satisfaction

We utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization. Because poor health can induce retirement, we instrument for retirement using eligibility for Social Security and employer-sponsored pensions and coverage by the Social Security earnings test. We find strong evidence that retirement improves reported health, mental health, and life satisfaction. In addition, we find evidence of improvements in functional limitations in the long run. Although the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up four or more years later, consistent with the view that health is a stock that evolves slowly. We find no evidence that the health improvements are driven by increased health care utilization. In fact, results suggest decreased utilization in some categories.

User Guide Notes

Alternate JournalHealth Econ
Citation Key9805
PubMed ID30141568