The Effect of Retirement on Health

This dissertation estimates the effect of retirement on health. In response to increased longevity and tighter public budget constraints, the general trend in developed countries is for Social Security systems to be modified to encourage people to remain in the labor force longer. Understanding the effect of retirement on health is important for predicting the consequence of these policies. This dissertation estimates the effect in two countries, the United States and China. These two countries provide a broader picture of the effect from different perspectives. The estimation in the United States focuses on voluntary retirement, and the estimation in China uses the mandatory retirement. To estimate the effect of retirement on health and mortality in the U.S., I study the 1983 reforms to the United States Social Security System that raised the retirement age for cohorts born after 1937. Combining IV and difference-in-difference methods, I find that retirement has a positive effect on self-reported bad health and decreases the probability among men of experiencing limitations in daily activities. However, retirement also increases the mortality rate by 0.46 percentage points for men and 1.4 percentage points for women. Heart disease contributes most to the effect on mortality. I also study the time use change after retirement in the U.S., and find that people spend most of their extra time on sleep and eating. To estimate the effect of retirement on health in China, I use the mandatory retirement policy in the public sector. With the difference-in-difference method between workers in public sector and private sector, I find that retirement has a negative effect on self-reported bad health and increase the hospitalization spending. It also increases the probability of reporting diabetes and heart disease. Several variables from physical examination and blood test result, that are related to these disease, such as personal BMI, High Density Lipoprotein (HDL), triglyceride also become worse after the retirement.