Health Transition after Retirement: Empirical evidence from public pension reform in Japan

Author Name CHEN Fengming (Tohoku University) / WAKABAYASHI Midori (Research Associate, RIETI) / YUDA Michio (Research Associate, RIETI)
Creation Date/NO. October 2022 22-J-034
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Considering the balance between maintaining and improving the health, quality of life and healthy life expectancy of the elderly and their corresponding social costs such as medical and long-term care are important issues in light of the arrival of the super-aging society in Japan. We use the individual panel data from the four waves of the Japanese Study of Aging and Retirement from 2007 to 2013 to examine how retirement from the labor market affects the health transition of elderly males. We use a fixed-effect instrumental variable estimation using a policy change in the pensionable age of public pension benefits as the instrumental variable to control the endogeneity in retirement decision. Many previous empirical studies have shown mixed results on the causal effect of retirement on health because there are many complex mechanisms, and we find that retirement significantly improves oral function and mental health but makes retirees more susceptible to lifestyle-related diseases. Moreover, our supplemental results indicate that i) a significant increase in dentistry utilization after retirement would contribute to improved oral health including improvement in chewing capacity, ii) freedom from labor leads to improved mental health, and that iii) fewer opportunities for health checkups lead to the development of lifestyle-related diseases.

Forthcoming: Che, Fengming, Midori Wakabayashi, and Michio Yuda. "The impact of retirement on health: Empirical evidence from the change in public pensionable age in Japan," The Journal of the Economics of Ageing.