22
where
j
denotes cohort and
is 0, 0, 0, 1, 2, 3, 4, 5, and 5 for the cohorts born 1931,
1932, 1933, 1934, 1935, 1936, 1937, 1938, and 1939. Thus we assume that the reform
affected each cohort equal to the number of years the cohort was affected by the 1992
Defense Bill (see
. Military employees born in 1933 are assumed not to be
affected by the reform. In this case
is the average effect on days in inpatient care if
the early retirement offer was increased by an additional year of early retirement. We
also estimate:
( (
|
))
(
)
∑
(
)
.
In this case,
is the pooled effect averaged for all treated cohorts within the range
1934-1939. Finally, we estimate a fully flexible specification:
( (
|
))
∑
(
)
∑
(
)
.
In this case, the parameters
( )
are separate reform effects for
each cohort. This includes no pooling over cohorts.
shows the results for the number of days in inpatient care during the period
of 56 to 70 years of age. All models include controls for cohort, income, education, and
county, in a very flexible manner. From columns (1) and (2) we observe that pooling the
cohorts increases the precision. The first column shows that an offered additional year
of retirement would decrease the number of days in inpatient care by around 8 percent.
This estimate is consistent with the base line results, where an offered 5-year reduction
of retirement age (from age 60 to 55) was found to reduce the number of days in
inpatient care by about 35 percent (see
. The estimate of the effect, when we
pool the effect over all treated cohorts from 1934-1939, is presented in column (2).
From this column we see an overall reduction in the number of days by around 38
percent, which is almost the same as the estimate in the baseline specification in
From column (3) we can see that in comparison with the cohort born 1931
(reference) there is, as expected, no statistically significant effect for the cohort born
1932. Nor do military employees born 1933 display an effect from the reform, which
also corresponds to our expectations, given the timing of the reform. There are
