Do the sick retire early? Chronic illness, asset accumulation and early retirement

Our objective is to determine how chronic illness affects asset accumulation and retirement. Previous studies have found that poor health leads to early retirement, but those studies failed to look at the indirect impact of chronic illness on retirement. Using data from the Health and Retirement Stu...

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Bibliographic Details
Published in:Applied economics 2007-08, Vol.39 (15), p.1921-1936
Main Authors: Miah, M. Solaiman, Wilcox-Gök, Virginia
Format: Article
Language:English
Subjects:
Aggregate analysis
Assets
Chronic illnesses
Early retirement
Health economics
Illness
Impact analysis
Labour force
Public health
Retirement
Social economics
Studies
U.S.A
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Summary:Our objective is to determine how chronic illness affects asset accumulation and retirement. Previous studies have found that poor health leads to early retirement, but those studies failed to look at the indirect impact of chronic illness on retirement. Using data from the Health and Retirement Study, we define an illness as chronic if the individual reports having asthma, cancer, heart disease, stroke or diabetes for four or more years. We first estimate how a chronic illness influences asset accumulation. We then estimate how asset accumulation and current poor health influence retirement. We observe that the vast majority of the chronically ill population do not report their general health to be poor nor do they report functional limitations in activities of daily living. Nevertheless, our results indicate that chronic illness leads these people to accumulate fewer assets during their working years and consequently retire later. Neither researchers nor policy-makers discussing the many critical issues surrounding illness and retirement have addressed this issue.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036840600690165