Because individuals aged 55-64 face large and uncertain medical expenditures without the guarantee of public insurance coverage provided by Medicare, the availability of post-retirement health insurance could be an important determinant in the retirement decisions of this group. We investigate the effect of health insurance on retirement by focusing on state and federal "continuation of coverage" mandates which grant the retiree the right to continue purchasing health insurance through a previous employer for a specified number of months after leaving the firm. We exploit variation in the timing and generosity of these laws to identify the effect of the availability of continuation coverage on retirement decisions, using data on 55-64 year-old males from the Current Population Survey and the Survey of Income and Program Participation. We find a sizeable and significant effect of continuation coverage on retirement; one year of mandated continuation benefits raises retirement rates by 20%. The effect appears to be uniform at all ages rather that larger near the age of Medicare eligibility. There is also a large increase in the insurance coverage of individuals who would have retired in the absence of continuation benefits. Our findings have important implications for policies which change the insurance coverage of early retirees, such as national health insurance.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
4469.
Length: Date of creation: Sep 1993 Date of revision: Handle: RePEc:nbr:nberwo:4469
Note: AG HC Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Find related papers by JEL classification: H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health I10 - Health, Education, and Welfare - - Health - - - General
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Robin L. Lumsdaine & James H. Stock & David A. Wise, 1996.
"Why Are Retirement Rates So High at Age 65?,"
NBER Chapters,
in: Advances in the Economics of Aging, pages 61-82
National Bureau of Economic Research, Inc.
[Downloadable!]
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.) This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.