Does Health Reform Lead to an Increase in Early Retirement? Evidence from Massachusetts

Abstract

This paper estimates whether the implementation of the 2006 Massachusetts health reform law affected the decision of individuals to retire early. Using data from the American Community Survey that spans 2002-2012, we estimate difference-in-differences models for retirement, in which individuals from Massachusetts form our treatment group and individuals from other Northeastern states form our treatment group. The estimates suggest that, in the full sample, the reform led to an approximately 0.6 percentage point increase in retirement from full-time work (from a base of 2.6%) though not from part-time work. However, the reform may have led to an increase in retirement from any job (part- or full-time) among lower income individuals.