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The causal effect of early retirement on medication use across sex and occupation: evidence from Danish administrative data

Author

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  • Jolien Cremers

    (Data Science Lab
    University of Copenhagen)

  • Torben Heien Nielsen

    (University of Copenhagen)

  • Claus Thorn Ekstrøm

    (University of Copenhagen)

Abstract

We examine the causal effect of early retirement on medication use using Danish registry data. A reform in early retirement schemes in 2006 gradually increased eligibility ages from 60 to 64 differentially across birth cohorts. This enables an instrumental variable design that was applied using novel g-estimation methods that alleviate bias in binary outcome IV models. Our data allow studying patterns in the short run (ages 59½–60½) and in the long run (ages 57–63). For those who were eligible already at age 60, retirement did not change overall medication use. However, when investigating medication and population subgroups, we see that painkiller use decreases and hypertension medication as well as mental health medication use increase after retirement in almost all population subgroups. Moreover, males as well as the blue-collar occupation subgroups do show decreases in overall medication use after early retirement. In conclusion, our analyses reveal that retirement can have important heterogeneous health effects across population groups and are potentially informative about the welfare benefits of social insurance more broadly.

Suggested Citation

  • Jolien Cremers & Torben Heien Nielsen & Claus Thorn Ekstrøm, 2024. "The causal effect of early retirement on medication use across sex and occupation: evidence from Danish administrative data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(9), pages 1517-1527, December.
  • Handle: RePEc:spr:eujhec:v:25:y:2024:i:9:d:10.1007_s10198-023-01660-0
    DOI: 10.1007/s10198-023-01660-0
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    More about this item

    Keywords

    Retirement; Health; Medication; Causal effect; Instrumental variable;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • I1 - Health, Education, and Welfare - - Health
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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