For people entering their 60s thoughts may turn to the prospect of retirement, with dreams of spending more time travelling, in their garden, etc. Many might be tempted to take early retirement, if they are in a position to allow it. However, could there be a negative effect from an early and permanent loss of an individual’s work life?

Kuhn and colleagues looked at the effect an early retirement could have on a person’s mortality.[1] They were able to account for the possibility of earlier retirement being taken by people with poorer health (and thus a higher mortality risk), due to a policy change in the unemployment insurance system of Austria during the 1980s. This change allowed those in eligible regions of the country to retire three years earlier than those who were ineligible. The time-frame of the change also allowed the authors to follow individuals over many years.

Analysis of administrative data showed that eligible men retired, on average, 5.5 months earlier, while women retired 8.5 months earlier. The authors found that retiring one year early resulted in a 5.5% increase in the risk of premature death in men (i.e. before the age of 73), corresponding to a loss of 2.2 months of life, but there was no significant change in risk for women. It is unknown why this difference is seen, but the authors suggest a number of possibilities, including that women can cope better with major life events, have healthier lifestyle changes postretirement, or that they do not suffer from a loss of social status to the same extent as men.

The authors posit a number of possible reasons for the increased risk, but none are conclusive. Of course, for some people, reducing life expectancy by a couple of months might be a fair trade-off to have three extra years to do whatever they want.

Peter Chilton, Research Fellow

Reference:

1. Kuhn A, Staubli S, Wuellrich J-P, Zweimüller J. Fatal attraction? Extended unemployment benefits, labor force exits, and mortality. J Public Econ. 2019.