Revisiting the effects of health on retirement expectations

Abstract How does health affect retirement expectations? We revisit this question using updated data from the Health and Retirement Study and an event study framework to estimate the causal effects of various health shocks on the self-assessed probabilities of working past older ages. Importantly, recent waves of survey data contain information on expectations for current workers and non-workers, which avoids sample selection issues encountered by previous studies. We find that declines in subjective health status and new diagnoses of objective health conditions decrease the probabilities of working past 62 and 65. Our findings highlight how poor health can cause people to expect to retire before becoming eligible for Social Security and Medicare benefits.