Causal effects of retirement timing on subjective health and drinking behavior

OBJECTIVE: This article explores the effects of the timing of retirement on subjective health and drinking behavior. Using panel data from the Health and Retirement Study (HRS), we test four theory-based hypotheses about these effects—that retirements maximize health outcomes and behaviors when they happen earlier, later, anytime, or on time. METHODS: We employ fixed and random effects regression models with instrumental variables to estimate the short- and long-term causal effects of retirement timing on self-reported health, depressive symptoms, and average number of drinks per day. RESULTS: Early retirements—those occurring prior to traditional and legal retirement age—dampen health outcomes and behaviors. DISCUSSION: Workers who begin their retirement transition before cultural and institutional timetables experience the worst health outcomes and behaviors; this finding offers partial support to the psychosocial-materialist approach that emphasizes the benefits of retiring later. Continued employment after traditionally expected retirement age, however, offers no health benefits. In combination, these findings offer some support for the cultural-institutional approach, but suggest that we need to modify our understanding of how cultural-institutional forces operate: Retiring too early can be problematic, but no disadvantages are associated with late retirements. Raising the retirement age, therefore, could potentially damage health outcomes and behaviors of retirees by expanding the group of those whose retirements would be considered early.