Causal Effects of Retirement Timing on Subjective Physical and Emotional Health

• Published in: The journals of gerontology. Series B, Psychological sciences and social sciences Psychological sciences and social sciences, 2013-01, Vol.68 (1), p.73-84
• Main Authors: CALVO, Esteban, SARKISIAN, Natalia, TAMBORINI, Christopher R
• Format: Article
• Language: English
• Subjects: Adult and adolescent clinical studies; Aged; Biological and medical sciences; Causality; Cohort Studies; Depression; Depression - psychology; Early retirement; Employment - psychology; Female; Geriatrics; Gerontology; Health; Health - statistics & numerical data; Health status; Health Surveys; Humans; Long term effects; Male; Medical sciences; Mental health; Middle Aged; Models, Psychological; Mood disorders; Psychology. Psychoanalysis. Psychiatry; Psychopathology. Psychiatry; Random effects; Retirees; Retirement; Retirement - legislation & jurisprudence; Retirement - psychology; Self Report; Time Factors; Timing; United States
• ISSN: 1079-5014; 1758-5368
• DOI: 10.1093/geronb/gbs097

This article explores the effects of the timing of retirement on subjective physical and emotional health. Using panel data from the Health and Retirement Study (HRS), we test 4 theory-based hypotheses about these effects-that retirements maximize health when they happen earlier, later, anytime, or on time. We employ fixed and random effects regression models with instrumental variables to estimate the short- and long-term causal effects of retirement timing on self-reported health and depressive symptoms. Early retirements--those occurring prior to traditional and legal retirement age--dampen health. Workers who begin their retirement transition before cultural and institutional timetables experience the worst health outcomes; this finding offers partial support to the psychosocial-materialist approach that emphasizes the benefits of retiring later. Continued employment after traditionally expected retirement age, however, offers no health benefits. In combination, these findings offer some support for the cultural-institutional approach but suggest that we need to modify our understanding of how cultural-institutional forces operate. Retiring too early can be problematic but no disadvantages are associated with late retirements. Raising the retirement age, therefore, could potentially reduce subjective health of retirees by expanding the group of those whose retirements would be considered early.