Short- and long-run estimates of the local effects of retirement on health

Fé, Eduardo and Hollingsworth, Bruce (2016) Short- and long-run estimates of the local effects of retirement on health. Journal of the Royal Statistical Society: Series A, 179 (4). pp. 1051-1067. ISSN 0964-1998

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    Abstract

    We explore the existence of short- and long-term effects of retirement on health. Short-term effects are estimated with a regression discontinuity design which is robust to weak instruments and where the underlying assumptions of continuity of potential outcomes are uncontroversial. To identify the long-term effects we propose a parametric model which, under strong assumptions, can separate normal deterioration of health from the causal effects of retirement. We apply our framework to the British Household Panel Survey and find that retirement has little effect on health. However, our estimates suggest that retirement opens the gate to a sedentary life with an impoverished social component and this is a channel through which retirement could indirectly affect health in the long run.