Health and aging before and after retirement

Abstract

We investigate occupation-specific aging patterns before and after retirement and test the level and rate effects of occupation predicted by the health capital model and the health deficit model. We use five waves of the Survey of Health, Aging, and Retirement in Europe (SHARE) and construct a frailty index for elderly men and women from 10 European countries. Occupational groups are classified according to low vs. high education, blue vs. white collar, and high vs. low physical or psychosocial job burden. Controlling for individual fixed effects, we find that, regardless of the classification used, workers from the first (low-status) group display more health deficits at any age and accumulate health deficits faster than workers from the second (high-status) group. We instrument retirement by statutory retirement ages (“normal” and “early”) and find that the health of workers in low-status occupations benefits greatly from retirement, whereas retirement effects for workers in high-status occupations are small and frequently insignificant. In support of the health deficit model, we find that the health status of individuals from low- and high-status groups diverges before and after retirement.

Physiological aging and life-cycle labor supply across countries

“…The convergence of health deficits predicted by the compensation effect may seem puzzling at first glance given the often observed divergence in health at the individual level. For example, it has been found that health and the frailty index of blue collar workers and white collar workers diverge with advancing age [ 50 , 61 ]. The key insight here is that the convergence result applies to differences in initial deficits in samples of populations (for example, stratified by countries or by gender) while the divergence result is observed for differences in persistent exposure to health conditions in samples of individuals .…”

“…Another strand of literature argues that health status is negatively affected by blue collar and physical job burden [47][48][49]. Specifically, in the context of the frailty index, exposure to physical or psychosocial job burden as well as employment in blue collar occupations has found to be associated with a faster accumulation of health deficits during the work life [50]. In order to address the issue of reverse causality, our identification strategy leverages a compensating regularity of the frailty index, implying that there exists a strong negative relationship between initial health deficits, measured at the beginning of working life, and the rate of health deficit accumulation.…”