4
number of days of inpatient care. The results are robust to the model specification. We
also find a lower risk of mortality for those who retired early.
From a heterogeneity analysis we find a greater reduction in inpatient care days for
those with low pre-retirement incomes and low education. One interpretation of this
could be that the effect is linked to less stress and less exposure to workplace hazards. A
second heterogeneity analysis, using different causes of death and number of days in
inpatient care due to different diagnoses, gives some support to a reduced risk of dying
from acute myocardial infarction.
The rest of the paper is structured as follows. Section 2 provides a discussion of the
earlier literature. Section 3 discusses the Swedish pension system. Section 4 describes
the early retirement reform. Section 5 discusses the methodological framework, the data
analyzed in this study, and the sample selections made. Section 6 provides the analyses.
Section 7 discusses the findings regarding effects of retirement on health. Section 8
concludes the study.
2
Earlier literature
Cross-sectional analyses usually find that those who retire early have worse post-
retirement health.
5
Taking these studies as evidence of a positive effect on the health of
later retirement suggests a “win-win” situation of prolonging or extending retirement
age in the population. However, the results from cross-sectional studies are
questionable, as individual decisions to retire are most likely influenced by health
reasons. That is, the population sector that retires early has worse health in general than
the population sector that retires later.
Now, though, there is an emerging literature, using data from both Europe and the
US, that deals with the potential problem of selection that uses longitudinal data and
quasi-experimental designs (e.g., Neuman, 2007; Bound & Waidmann, 2008; Coe &
Lindeboom, 2008; Westerlund et al., 2009; Vahtera et al., 2009; Coe & Zamarro, 2011;
Hernaes et al., 2013; Kuhn et al., 2010; Bloemen et al., 2013). The general result from
5
An exception is Hult et al. (2010), who found no effect on mortality. Their study is based on a cohort of male
construction workers. They exclude individuals with diagnoses normally connected to increased mortality. For the
remaining individuals, they compare the increased risk of those entering early retirement against those who are still
working. Hult et al. (2010) have detailed information on individuals‟ health before (potential) retirement and use
longitudinal data. However, since they use death as a health outcome, they have no possible way to use the
longitudinal aspect of the data.
