IDEAS home Printed from https://ideas.repec.org/p/qld/uq2004/620.html
   My bibliography  Save this paper

Spillover Effects of Retirement: does health vulnerability matter?

Author

Listed:
  • Dominic Byrne

    (School of Economics, University of Queensland)

  • Do Won Kwak

    (Graduate School of International Studies, Korea University, Seoul, Korea)

  • Kam Ki Tang

    (School of Economics, University of Queensland, Australia)

  • Myra Yazbeck

    (Department of Economics, University of Ottawa, Canada; School of Economics, University of Queensland)

Abstract

The current literature investigating the impact of retirement and the associated spousal spillover effects overlooks the unintended effects of retirement on spouses in vulnerable health, namely spouses with long-term health conditions. In this paper, we fill this gap in the literature and investigate the impact of an individual’s retirement on their partner’s health outcomes when their partners have long-term health conditions. Given the inherent identification challenges associated with entry into retirement, we exploit an exogenous variation to pension-qualifying age in Australia. Using a Fuzzy Regression Discontinuity Design and data from the Household Income and Labour Dynamics in Australia survey, we find that the retirement of the husband has a positive impact on the wife’s Quality Adjusted Life Years (QALY) and other physical and mental health outcomes. Drawing upon the literature on QALY and cost-effectiveness thresholds, we estimate that the dollar value of the husband-to-wife spillovers could be worth somewhere between AUD8,354 and AUD25,062.

Suggested Citation

  • Dominic Byrne & Do Won Kwak & Kam Ki Tang & Myra Yazbeck, 2020. "Spillover Effects of Retirement: does health vulnerability matter?," Discussion Papers Series 620, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:620
    as

    Download full text from publisher

    File URL: https://economics.uq.edu.au/files/39636/620.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marcantonio Caltabiano & Maria Gabriella Campolo & Antonino Pino, 2016. "Retirement and Intra-Household Labour Division of Italian Couples: A New Simultaneous Equation Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(3), pages 1217-1238, September.
    2. Erich Battistin & Agar Brugiavini & Enrico Rettore & Guglielmo Weber, 2009. "The Retirement Consumption Puzzle: Evidence from a Regression Discontinuity Approach," American Economic Review, American Economic Association, vol. 99(5), pages 2209-2226, December.
    3. Godard, Mathilde, 2016. "Gaining weight through retirement? Results from the SHARE survey," Journal of Health Economics, Elsevier, vol. 45(C), pages 27-46.
    4. Elena Stancanelli & Arthur Van Soest, 2016. "Partners’ leisure time truly together upon retirement," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-19, December.
    5. ,, 2003. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 19(4), pages 691-705, August.
    6. Chen, Qihui & Deng, Tinghe & Bai, Junfei & He, Xiurong, 2017. "Understanding the retirement-consumption puzzle through the lens of food consumption-fuzzy regression-discontinuity evidence from urban China," Food Policy, Elsevier, vol. 73(C), pages 45-61.
    7. Fitzpatrick, Maria D. & Moore, Timothy J., 2018. "The mortality effects of retirement: Evidence from Social Security eligibility at age 62," Journal of Public Economics, Elsevier, vol. 157(C), pages 121-137.
    8. Clark, Andrew E. & Etile, Fabrice, 2006. "Don't give up on me baby: Spousal correlation in smoking behaviour," Journal of Health Economics, Elsevier, vol. 25(5), pages 958-978, September.
    9. Davillas, Apostolos & Pudney, Stephen, 2017. "Concordance of health states in couples: Analysis of self-reported, nurse administered and blood-based biomarker data in the UK Understanding Society panel," Journal of Health Economics, Elsevier, vol. 56(C), pages 87-102.
    10. Bertoni, Marco & Brunello, Giorgio, 2017. "Pappa Ante Portas: The effect of the husband's retirement on the wife's mental health in Japan," Social Science & Medicine, Elsevier, vol. 175(C), pages 135-142.
    11. Brazier, John & Roberts, Jennifer & Deverill, Mark, 2002. "The estimation of a preference-based measure of health from the SF-36," Journal of Health Economics, Elsevier, vol. 21(2), pages 271-292, March.
    12. Doorley, Karina & Stancanelli, Elena G. F., 2019. "Marital Status and Retirement: An Empirical Study for France," IZA Discussion Papers 12299, Institute of Labor Economics (IZA).
    13. Bonsang, Eric & Adam, Stéphane & Perelman, Sergio, 2012. "Does retirement affect cognitive functioning?," Journal of Health Economics, Elsevier, vol. 31(3), pages 490-501.
    14. Aspen Gorry & Devon Gorry & Sita Nataraj Slavov, 2018. "Does retirement improve health and life satisfaction?," Health Economics, John Wiley & Sons, Ltd., vol. 27(12), pages 2067-2086, December.
    15. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    16. ,, 2003. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 19(5), pages 879-883, October.
    17. Susann Rohwedder & Robert J. Willis, 2010. "Mental Retirement," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 119-138, Winter.
    18. Clark, Andrew E. & Etilé, Fabrice, 2011. "Happy house: Spousal weight and individual well-being," Journal of Health Economics, Elsevier, vol. 30(5), pages 1124-1136.
    19. Latif, Ehsan, 2011. "The impact of retirement on psychological well-being in Canada," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 373-380, August.
    20. Adam M. Lavecchia, 2018. "Do "Catch-Up Limits" Raise Retirement Saving? Evidence from a Regression Discontinuity Design," National Tax Journal, National Tax Association;National Tax Journal, vol. 71(1), pages 121-154, March.
    21. Müller, Tobias & Shaikh, Mujaheed, 2018. "Your retirement and my health behavior: Evidence on retirement externalities from a fuzzy regression discontinuity design," Journal of Health Economics, Elsevier, vol. 57(C), pages 45-59.
    22. Coe, Norma B. & Zamarro, Gema, 2011. "Retirement effects on health in Europe," Journal of Health Economics, Elsevier, vol. 30(1), pages 77-86, January.
    23. David M. Cutler & Edward L. Glaeser, 2010. "Social Interactions and Smoking," NBER Chapters, in: Research Findings in the Economics of Aging, pages 123-141, National Bureau of Economic Research, Inc.
    24. Eibich, Peter, 2015. "Understanding the Effect of Retirement on Health: Mechanisms and Heterogeneity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 43, pages 1-12.
    25. Wooldridge, Jeffrey M., 2007. "Inverse probability weighted estimation for general missing data problems," Journal of Econometrics, Elsevier, vol. 141(2), pages 1281-1301, December.
    26. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    27. Motegi, Hiroyuki & Nishimura, Yoshinori & Oikawa, Masato, 2020. "Retirement and health investment behaviors: An international comparison," The Journal of the Economics of Ageing, Elsevier, vol. 16(C).
    28. ,, 2003. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 19(6), pages 1195-1198, December.
    29. Diana Warren, 2013. "Retirement Decisions of Couples: The Impact of Spousal Characteristics and Preferences on the Timing of Retirement," Melbourne Institute Working Paper Series wp2013n41, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    30. Bonsang, Eric & van Soest, Arthur, 2020. "Time devoted to home production and retirement in couples: A panel data analysis," Labour Economics, Elsevier, vol. 65(C).
    31. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    32. Fischer, Björn & Müller, Kai-Uwe, 2020. "Time to care? The effects of retirement on informal care provision," Journal of Health Economics, Elsevier, vol. 73(C).
    33. ,, 2003. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 19(1), pages 225-228, February.
    34. Yoshinori Nishimura & Masato Oikawa & Hiroyuki Motegi, 2018. "What Explains The Difference In The Effect Of Retirement On Health? Evidence From Global Aging Data," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 792-847, July.
    35. Julien Bergeot & Roméo Fontaine, 2020. "The heterogeneous effect of retirement on informal care behavior," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1101-1116, October.
    36. Michael Insler, 2014. "The Health Consequences of Retirement," Journal of Human Resources, University of Wisconsin Press, vol. 49(1), pages 195-233.
    37. Johnston, David W. & Lee, Wang-Sheng, 2009. "Retiring to the good life? The short-term effects of retirement on health," Economics Letters, Elsevier, vol. 103(1), pages 8-11, April.
    38. Khachapon Nimdet & Nathorn Chaiyakunapruk & Kittaya Vichansavakul & Surachat Ngorsuraches, 2015. "A Systematic Review of Studies Eliciting Willingness-to-Pay per Quality-Adjusted Life Year: Does It Justify CE Threshold?," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-16, April.
    39. Kämpfen, Fabrice & Maurer, Jürgen, 2016. "Time to burn (calories)? The impact of retirement on physical activity among mature Americans," Journal of Health Economics, Elsevier, vol. 45(C), pages 91-102.
    40. Kadir Atalay & Garry F. Barrett, 2015. "The Impact of Age Pension Eligibility Age on Retirement and Program Dependence: Evidence from an Australian Experiment," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 71-87, March.
    41. ,, 2003. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 19(2), pages 411-413, April.
    42. Shai, Ori, 2018. "Is retirement good for men’s health? Evidence using a change in the retirement age in Israel," Journal of Health Economics, Elsevier, vol. 57(C), pages 15-30.
    43. Atalay, Kadir & Barrett, Garry F., 2014. "The causal effect of retirement on health: New evidence from Australian pension reform," Economics Letters, Elsevier, vol. 125(3), pages 392-395.
    44. Sebastian Calonico & Matias D. Cattaneo & Max H. Farrell & Roc ́ıo Titiunik, 2017. "rdrobust: Software for regression-discontinuity designs," Stata Journal, StataCorp LP, vol. 17(2), pages 372-404, June.
    45. Stefanie Behncke, 2012. "Does retirement trigger ill health?," Health Economics, John Wiley & Sons, Ltd., vol. 21(3), pages 282-300, March.
    46. Beth Woods & Paul Revill & Mark Sculpher & Karl Claxton, 2015. "Country-level cost-effectiveness thresholds: initial estimates and the need for further research," Working Papers 109cherp, Centre for Health Economics, University of York.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Garrouste, Clémentine & Juet, Arthur & Samson, Anne-Laure, 2023. "Direct and crowding-out effects of a Hepatitis B vaccination campaign," Economics & Human Biology, Elsevier, vol. 51(C).
    2. Davillas, Apostolos & Pudney, Stephen, 2017. "Concordance of health states in couples: Analysis of self-reported, nurse administered and blood-based biomarker data in the UK Understanding Society panel," Journal of Health Economics, Elsevier, vol. 56(C), pages 87-102.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mattia Filomena & Matteo Picchio, 2023. "Retirement and health outcomes in a meta‐analytical framework," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1120-1155, September.
    2. Müller, Tobias & Shaikh, Mujaheed, 2018. "Your retirement and my health behavior: Evidence on retirement externalities from a fuzzy regression discontinuity design," Journal of Health Economics, Elsevier, vol. 57(C), pages 45-59.
    3. Clémentine Garrouste & Elsa Perdrix, 2022. "Is there a consensus on the health consequences of retirement? A literature review," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 841-879, September.
    4. Steve Briand, 2020. "Beyond the direct impact of retirement: coordination by couples in preventive and risky behaviors," Working Papers hal-02467440, HAL.
    5. Pedron, Sara & Maier, Werner & Peters, Annette & Linkohr, Birgit & Meisinger, Christine & Rathmann, Wolfgang & Eibich, Peter & Schwettmann, Lars, 2020. "The effect of retirement on biomedical and behavioral risk factors for cardiovascular and metabolic disease," Economics & Human Biology, Elsevier, vol. 38(C).
    6. Barschkett, Mara & Geyer, Johannes & Haan, Peter & Hammerschmid, Anna, 2022. "The effects of an increase in the retirement age on health — Evidence from administrative data," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    7. Matteo Picchio & Jan C. van Ours, 2020. "Mental Health Effects of Retirement," De Economist, Springer, vol. 168(3), pages 419-452, September.
    8. Kuusi, T. & Martikainen, P. & Valkonen, T., 2020. "The influence of old-age retirement on health: Causal evidence from the Finnish register data," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    9. Barschkett, Mara & Geyer, Johannes & Haan, Peter & Hammerschmid, Anna, 2022. "The effects of an increase in the retirement age on health — Evidence from administrative data," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23, pages 1-53.
    10. Shenglong Liu & Yuanyuan Wan & Xiaoming Zhang, 2024. "Retirement Spillover Effects on Spousal Health in Urban China," Journal of Family and Economic Issues, Springer, vol. 45(3), pages 756-783, September.
    11. Motegi, Hiroyuki & Nishimura, Yoshinori & Oikawa, Masato, 2020. "Retirement and health investment behaviors: An international comparison," The Journal of the Economics of Ageing, Elsevier, vol. 16(C).
    12. Chen, Fengming & Wakabayashi, Midori & Yuda, Michio, 2024. "The impact of retirement on health: Empirical evidence from the change in public pensionable age in Japan," The Journal of the Economics of Ageing, Elsevier, vol. 28(C).
    13. Leimer, Birgit & van Ewijk, Reyn, 2022. "No “honeymoon phase”: whose health benefits from retirement and when," Economics & Human Biology, Elsevier, vol. 47(C).
    14. Eibich, Peter & Goldzahl, Léontine, 2021. "Does retirement affect secondary preventive care use? Evidence from breast cancer screening," Economics & Human Biology, Elsevier, vol. 43(C).
    15. Zhang, Yi & Salm, Martin & van Soest, Arthur, 2018. "The effect of retirement on healthcare utilization: Evidence from China," Journal of Health Economics, Elsevier, vol. 62(C), pages 165-177.
    16. Antoine Bozio & Clémentine Garrouste & Elsa Perdrix, 2021. "Impact of later retirement on mortality: Evidence from France," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1178-1199, May.
    17. Thang Dang, 2022. "Retirement and health services utilization in a low‐income country," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(3), pages 597-620, July.
    18. Apouey, Bénédicte H. & Guven, Cahit & Senik, Claudia, 2019. "Retirement and Unexpected Health Shocks," Economics & Human Biology, Elsevier, vol. 33(C), pages 116-123.
    19. Pierre-Jean Messe & François-Charles Wolff, 2019. "Healthier when retiring earlier? Evidence from France," Applied Economics, Taylor & Francis Journals, vol. 51(47), pages 5122-5143, October.
    20. Messe, Pierre-Jean & Wolff, François-Charles, 2019. "The short-term effects of retirement on health within couples: Evidence from France," Social Science & Medicine, Elsevier, vol. 221(C), pages 27-39.

    More about this item

    Keywords

    Spillovers; Retirement; Long-term Health Conditions; Regression Discontinuity Design;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I19 - Health, Education, and Welfare - - Health - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qld:uq2004:620. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SOE IT (email available below). General contact details of provider: https://edirc.repec.org/data/decuqau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.