Retirement and healthcare utilization

Abstract

Pension systems and reforms thereof are often discussed in the context of financial viability. In industrialized countries, these debates grow in intensity with the aging of the population; however, an increase in retirement age may create unintended side effects with regards to retiree health or healthcare costs. This study empirically analyzes the effect of (early) retirement on individual inpatient and outpatient healthcare expenditure in Austria. We use comprehensive labor market and retirement data from the Austrian Social Security Database, together with detailed information about individual inpatient and outpatient healthcare service utilization in the province of Upper Austria. To account for endogeneity in retirement decisions, we exploit exogenous variation in the early retirement age as induced by two Austrian pension reforms (i.e., those in 2000 and 2003). We find there to be significant negative effects of retirement on healthcare expenditure. For both genders, retirement reduces subsequent expenditure for outpatient medical attendance and hospitalization. Analyses of disaggregated components of healthcare expenditure confirm a positive health effect caused by physical and emotional relief following retirement. Apart from direct health effects, the results also reveal behavioral changes in the utilization of healthcare services. These changes in health behavior seem particularly relevant among blue-collar workers.JEL Classifications: I11, I12, J26, H51

Retirement and voluntary work provision: Evidence from the Australian Age Pension reform

“…However, conditional on a smooth age trend, the binary instrument indicating whether having reached certain specific age is unlikely to have an impact on people's voluntary work provision except through the channel of their retirement. Retirement induced by social security incentives is exogenous and has been used widely in the extant literature (Bonsang et al, 2012;Stancanelli and Van Soest, 2012;Eibich, 2015;Zhu and He, 2015;Kampfen and Maurer, 2016;Zhu, 2016;Atalay et al, , 2020Fischer and Muller, 2020;Frimmel and Pruckner, 2020;Nguyen et al, 2020).…”

Does Working Longer Enhance Old Age?

“…The first round of these studies used HRSlike data and variation in retirement eligibility rules in pensions systems, or sometimes across different pension systems in different countries, to identify the effects of retirement on health (Bound and Waidmann 2007;Behncke 2012;Coe and Zamarro 2011;Delugas and Balia 2019;Lucifora and Vigani 2018;Bertoni et al 2018). The second round has used variation in pension eligibility rules, sometimes long-standing eligibility rules and other times unanticipated early retirement windows, coupled with administrative data on health outcomes, health expenditures and health care usage (Kuhn et al, 2019;Bloemen et al, 2017;Hallberg et al, 2015;Nielsen 2019;Grøtting 2019;Giesecke, 2019;Hagen 2018;Shai 2018;Zhang et al 2018;Frimmel and Pruckner 2018; Rogne and Syse 2018; Zulkarnain and Rutledge 2018).…”

Does retirement affect secondary preventive care use? Evidence from breast cancer screening

“…Both Coe and Zamarro (2015) and Frimmel and Pruckner (2018) examine the effect of retirement on healthcare utilization and include screening participation as outcomes. Frimmel and Pruckner (2018) use Austrian register data and find a decrease in participation in health check-ups and prostate-specific antigen testing for men, but no changes in gynecological screening and mammography use for women. Coe and Zamarro (2015) examine cholesterol checks and prostate cancer screening using HRS data.…”

“…3 Yet, the mechanisms behind these changes remain unclear. Frimmel and Pruckner (2018) examine heterogeneity by occupation and find that their results (for the screening outcomes) are primarily driven by blue-collar workers. Coe and Zamarro (2015) consider heterogeneity between health systems using SHARE data, and thus do not report estimates for their screening outcomes.…”

“…First of all, this is one of the first studies to provide comprehensive evidence of the effect of retirement on secondary preventive care among women and especially on breast cancer screening. While Frimmel and Pruckner (2018) also considered mammography use in a single country, we also provide detailed evidence on other types of secondary prevention for women across 25 different countries .Second, we add to the existing literature by investigating new mechanisms -health insurance coverage and changes in knowledge of breast cancer screening and treatment at retirement. Third, the cross country nature of our data, and the gradual implementation of screening programs in Europe allows us to study effect heterogeneity by institutional settings such as the existence of a screening program.…”