Does Retirement Age Impact Mortality?
Is there a causal link, positive or negative, from retirement age to mortality? Leaving employment may involve reduced stress and greater enjoyment of life, suggesting that early retirement enhances longevity. However, it may also lead to reduced mental and physical activity, loss of social networks, and health-adverse habits, suggesting that later retirement may extend expected lifespan.
Increasing life expectancy, especially at older ages, is imparting a new urgency to this question. Many OECD countries, looking ahead to the burgeoning fiscal burden of social security entitlements, have responded to increasing longevity by raising the statutory pension age; others have announced future increases (OECD 2011). To the extent that pension access age influences actual retirement age, economic assessment of these policy reforms requires evidence about whether, how, and to what extent such changes affect life expectancy.
While many papers address the relationship between retirement and mortality, the existing literature has thus far not succeeded in providing definitive guidance on its nature. This is primarily because health status influences both the timing of retirement and mortality. While early retirement may influence longevity, poor health may both induce a worker to retire and lead to an earlier death. Controlling for the ensuing selection bias is difficult, and until recently, attempts to do so have been unconvincing. As well, data sources vary in their time span and reliability, and data records sometimes do not extend to late ages.