The Influence of Old-age Retirement on Health: Causal Evidence from the Finnish Register Data

Kuusi TeroMartikainen PekkaValkonen Tarmo

Abstract

We quantify the impact of old-age retirement on health using longitudinal Finnish register data for the period 2000–2012, which allows for a strict isolation of the effects of transition from work to retirement for both mental and physical health indicators. We use the lowest statutory eligibility age for full old-age pensions, 63 years, as an instrument in FE-IV estimation to ensure causal inference.

We find that (1) retirement moderately decreases the use of antidepressants, especially for women; (2) the beneficial effects of retirement on the cardiovascular and musculoskeletal conditions are smaller and more diffused; (3) there is no robust evidence that retirement effects vary systematically among socioeconomic groups, although more robust declines in musculoskeletal diseases were observed among manual-labour men; and (4) the beneficial effects in antidepressant use can be extended to apply to most Finns retiring at ages 62–64 based on our test of external validity.

Publication info

Series
ETLA Working Papers 67
Date
18.04.2019
Keywords
Health, Health behaviour, Retirement, Retirement policies, Demographic economics
ISSN
2323-2420, 2323-2439 (Pdf)
JEL
I10, I12, J26, J18
Pages
26
Language
English