Thursday, June 20, 2013

Retirement Kills

New research presented in this paper indicates that being retired decreases physical, mental and self-assessed health. The adverse effects increase as the number of years spent in retirement increases.

The results vary somewhat depending on the model and research strategy employed. By way of example, the following results were obtained:
  • Retirement decreases the likelihood of being in ‘very good’ or ‘excellent’ self-assessed health by about 40 per cent
  • Retirement increases the probability of suffering from clinical depression by about 40 per cent
  • Retirement increases the probability of having at least one diagnosed physical condition by about 60 per cent
  • Retirement increases the probability of taking a drug for such a condition by about 60 per cent.
Higher state pension ages are not only possible (given longer life expectancy) and desirable (given the fiscal costs of state pensions) but later retirement should, in fact, lead to better average health in retirement. As such the government should remove impediments to later retirement that are to be found in state pension systems, disability benefit provision and employment protection legislation.

-Gabriel Sahlgren for the Institute of Economic Affairs, London, in his article "Work Longer, Live Healthier: The relationship between economic activity, health and government policy," describing the results of his research on data from the Survey of Health, Ageing and Retirement in Europe (SHARE).  Thanks to the American Association of Individual Investors, in its June 2013 issue of the AAII Journal, for reporting on the Sahlgren research.

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