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Your Retirement and My Health Behaviour: Evidence on Retirement Externalities from a Fuzzy Regression Discontinuity Design

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  • Müller, Tobias
  • Shaikh, Mujaheed

Abstract

This paper presents evidence on intra-household retirement externalities by assessing the causal effect of partner's retirement on own health behaviour in Europe. We identify partner's retirement effects by applying a fuzzy regression discontinuity (RD) framework using retirement eligibility as an exogenous instrument for partner's retirement status. Using data from the Survey of Health, Ageing and Retirement in Europe (SHARE) we find that while partner's retirement increases own physical activity, it also increases smoking by up to 7 cigarettes a day and increases alcohol intake by 1-2 drinks per day. Furthermore, we find that physical activity increases only for individuals that are themselves retired pointing toward compensated effects that arise due to husband's and wife's retirement being complements. Similarly, an increase in alcohol intake is observed only if the individuals are themselves retired and an increase in smoking is only observed if the partner is a smoker suggesting mutual positive externalities and leisure complementarities.

Suggested Citation

  • Müller, Tobias & Shaikh, Mujaheed, 2016. "Your Retirement and My Health Behaviour: Evidence on Retirement Externalities from a Fuzzy Regression Discontinuity Design," MPRA Paper 70857, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:70857
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    Keywords

    Retirement Externalities; Health Behaviour; Fuzzy Regression Discontinuity Design;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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