Delayed retirement : effects on health and healthcare utilization

This paper estimates the effect of a reform-induced increase in the early retirement age (ERA) on labor supply, health, and healthcare utilization using detailed Danish administrative data and a regression discontinuity design. We show that while raising the ERA successfully increased employment, it also led to spillovers into other public transfers and increased the number of self-supporting individuals. We find that the increased ERA led to small and insignificant effects on GP visits and the use of painkillers, as well as borderline significant, small positive effects on the use of antidepressants and CVD medicine. Further analysis shows that individuals who were employed due to the reform had lower pre-reform income and wealth, while the individuals who were not employed despite being affected by the reform were characterized by worse health before the reform announcement. We argue that possibilities for exiting employment serve as a potentially important mitigating mechanism for health and healthcare utilization effects by sorting vulnerable individuals out of employment.