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Impact of Retirement and Re-employment on Health of Older Adults

Author

Listed:
  • Do Won Kwak
  • Jong-Wha Lee

Abstract

Increasing life expectancy poses significant challenges to the employment and quality of life of older adults. This study examines the impact of retirement and re-employment on the health of older adults in Korea, utilizing longitudinal data from 2008 to 2020. We employ the instrumental variables method to estimate causal effects by leveraging variations in pension eligibility age and benefit amounts. The results reveal that retirement leads to a significant deterioration in health outcomes, including self-rated health, chronic diseases, and depression among older individuals. Conversely, re-employment after retirement is associated with a notable improvement in overall health. We find that retirement and re-employment influenced retirees’ health by changing their engagement in physical and social activities. These results suggest that policies encouraging late retirement or facilitating new employment opportunities and social activities post-retirement may mitigate or delay adverse health outcomes among older adults.

Suggested Citation

  • Do Won Kwak & Jong-Wha Lee, 2025. "Impact of Retirement and Re-employment on Health of Older Adults," CAMA Working Papers 2025-08, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2025-08
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    File URL: https://crawford-prod.anu.edu.au/sites/default/files/2025-02/08_2025_Kwak_Lee_0.pdf
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    More about this item

    Keywords

    aging; depression; health; retirement; re-employment;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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