Retirement Transitions and Health Outcomes - A Panel Study using SHARE Data

Abstract: A growing ageing population and pressures on the public pension system have opened up a conversation on how to best care for the elderly, but also the financial realities of supporting them through retirement. With many countries either considering to implement, or having already implemented increases in pension eligibility ages, a relevant question is then how this impacts the health and well-being of those affected, and through which mechanisms these changes occur. This paper utilises data from the Survey of Health, Ageing, and Retirement in Europe (SHARE), and fixed-effects and instrumental variable strategy which uses ordinary retirement ages as an instrument for retirement. Retirement is found to improve self-rated health and activities of daily living, which may be due to a simultaneous increase in exercise. Estimates from heterogeneity analysis and robustness checks are presented. It is also concluded that key variables are sensitive to the choice of econometric model.