Health insurance and retirement behavior: evidence from the health and retirement survey

This paper studies the role of health insurance in the retirement decisions of older workers. As policymakers consider mechanisms for how to increase access to affordable health insurance for the near elderly, considerations of the potential labor force implications of such policies will be importan t to consider - potentially inducing retirements just at a time when the la bor force is shrinking. Using data from the 1992 and 1996 waves of the Heal th and Retirement Survey, this study demonstrates that access to post-retir ement health insurance has a large effect on retirement. Among older male w orkers, those with retiree health benefit offers are 68% more likely to ret ire land those with non-employment based insurance are 448 more likely to r etire) than their counterparts who would lose employment-based health insur ance upon retirement. In addition, the study demonstrated that in retiremen t models, when retiree health benefits are controlled for, the effects of p ension coverage are reduced, suggesting that these effects may have been ov erestimated in the prior literature. (C) 2000 Elsevier Science B.V. All rig hts reserved.