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Fatal attraction? Extended unemployment benefits, labor force exits, and mortality


Kuhn, Andreas; Staubli, Stefan; Wuellrich, Jean-Philippe; Zweimüller, Josef (2020). Fatal attraction? Extended unemployment benefits, labor force exits, and mortality. Journal of Public Economics, 191:104087.

Abstract

We estimate the causal effect of a permanent and premature exit from the labor force on mortality. To overcome the problem of negative health selection into retirement, we exploit a policy change in Austria's unemployment insurance system that allows older eligible workers to exit the labor force 3 years earlier relative to comparable non-eligible workers. Using administrative data with precise information on mortality and retirement, we find that the policy change induces eligible men (women) to retire 5.5 (8.5) months earlier. Instrumental variable estimates show that for men retiring one year earlier causes a 5.5% increase in the risk of premature death and a 2.2 months reduction in the age at death but has no significant effect for women.

Abstract

We estimate the causal effect of a permanent and premature exit from the labor force on mortality. To overcome the problem of negative health selection into retirement, we exploit a policy change in Austria's unemployment insurance system that allows older eligible workers to exit the labor force 3 years earlier relative to comparable non-eligible workers. Using administrative data with precise information on mortality and retirement, we find that the policy change induces eligible men (women) to retire 5.5 (8.5) months earlier. Instrumental variable estimates show that for men retiring one year earlier causes a 5.5% increase in the risk of premature death and a 2.2 months reduction in the age at death but has no significant effect for women.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Finance
Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Economics and econometrics, finance, early retirement, mortality, health behavior, instrumental variable
Language:English
Date:1 November 2020
Deposited On:14 Feb 2020 11:43
Last Modified:17 Oct 2020 01:49
Publisher:Elsevier
ISSN:0047-2727
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.jpubeco.2019.104087
Project Information:
  • : FunderSNSF
  • : Grant IDPBZHP1-133428
  • : Project TitleMatch Quality Gains from Unemployment Insurance

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