Volume 20, Number 3 (Summer) 1985
Anderson, Kathryn H., and Richard V. Burkhauser. 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle." Journal of Human Resources 20(3):315-330.
Traditional empirical models of retirement which use a self-assessed health measure have often found that the wage rate has a surprisingly small effect on retirement. Using both a self-reported health measure and one not based on self-report (subsequent mortality experience) in a more general reduced- form joint-demand framework, we test the importance of the interaction effects of health and retirement. Our findings are consistent with a joint determination of health and retirement. The wage elasticity using either health measure is about equal to that found in a single-equation model when a mortality measure is used, but all three elasticities are five times greater than one found using self-reported health in a traditional single-equation model.
The authors are, respectively, Assistant Professor and Associate
Professor, Department of Economics, Vanderbilt University.
The research reported here was supported in part by funds
from the Office of Pension and Welfare Benefit Programs, U.S. Department of
Labor. We are indebted to Lola Irelan and Cliff Patrick of the Social Security
Administration for their help in providing the data, and to J. S. Butler, Robert
H. Haveman, Frank A. Sloan, and Barbara L. Wolfe for helpful first readings.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X