DP8024 Fatal Attraction? Access to Early Retirement and Mortality

Author(s): Andreas Kuhn, Jean-Philippe Wuellrich, Josef Zweim├╝ller
Publication Date: September 2010
Keyword(s): early retirement, endogeneity, health behavior, instrumental variable, mortality, premature death
JEL(s): I1, J14, J26
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=8024

We estimate the causal e ffect of early retirement on mortality for blue-collar workers. To overcome the problem of endogenous selection, we exploit an exogenous change in unemployment insurance rules in Austria that allowed workers in eligible regions to withdraw from the workforce up to 3.5 years earlier than those in non-eligible regions. For males, instrumental-variable estimates show a significant 2.4 percentage points (about 13%) increasein the probability of dying before age 67. We do not find any adverse effect early retirement onmortality for females. Death causes indicate a significantly higher incidence of cardiovascular disorders among eligible workers, suggesting that changes in health-related behavior explain increased mortality among male early retirees.