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The tradeoff between health and wealth in retirement decisions

Series Title(s):
Center for Retirement Research working paper
Author(s):
Brown, Kristine M., author
Center for Retirement Research at Boston College, author.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, May 2014
Language(s):
English
Format:
Text
Subject(s):
Health Benefit Plans, Employee
Income
Insurance Benefits
Insurance Coverage
Insurance, Health
Pensions
Retirement
Aged
Middle Aged
Time Factors
Humans
California
United States
Genre(s):
Technical Report
Abstract:
In the United States, because access to health insurance is tied to employment, the availability of retiree health insurance interacts with post-retirement income to shape the retirement decision. This paper uses administrative data from the California Department of Education to estimate the rate at which individuals' trade off post-retirement health insurance benefits for a longer retirement and for retirement income benefits. The sensitivity of retirement to the return to working in terms of post-retirement health insurance is estimated. This estimate is then compared to the sensitivity of retirement to pension generosity in order to determine the implied rate at which individuals substitute between health insurance and pension benefits. The two estimation methods used leverage plausibly exogenous benefit variation driven by the sharp features of the retiree benefit programs. The results imply that individuals will delay retirement to become eligible for retiree health benefits, but that the effect is small relative to the effect of pension benefits on retirement timing.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Extent:
1 online resource (1 PDF file (20 pages))
Illustrations:
Illustrations
NLM Unique ID:
101646657 (See catalog record)
Series Title(s):
Center for Retirement Research working paper
Author(s):
Brown, Kristine M., author
Center for Retirement Research at Boston College, author.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, May 2014
Language(s):
English
Format:
Text
Subject(s):
Health Benefit Plans, Employee
Income
Insurance Benefits
Insurance Coverage
Insurance, Health
Pensions
Retirement
Aged
Middle Aged
Time Factors
Humans
California
United States
Genre(s):
Technical Report
Abstract:
In the United States, because access to health insurance is tied to employment, the availability of retiree health insurance interacts with post-retirement income to shape the retirement decision. This paper uses administrative data from the California Department of Education to estimate the rate at which individuals' trade off post-retirement health insurance benefits for a longer retirement and for retirement income benefits. The sensitivity of retirement to the return to working in terms of post-retirement health insurance is estimated. This estimate is then compared to the sensitivity of retirement to pension generosity in order to determine the implied rate at which individuals substitute between health insurance and pension benefits. The two estimation methods used leverage plausibly exogenous benefit variation driven by the sharp features of the retiree benefit programs. The results imply that individuals will delay retirement to become eligible for retiree health benefits, but that the effect is small relative to the effect of pension benefits on retirement timing.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Extent:
1 online resource (1 PDF file (20 pages))
Illustrations:
Illustrations
NLM Unique ID:
101646657 (See catalog record)