Does poor health raise preferences for retirement?

Abstract

The objective of this study is to examine the associations of health status with retirement attitudes in terms of retirement leisure preference and worry for retirement. Data are from the 2003 Survey of Health and Living Status of the Middle Aged and Elderly in Taiwan. Our results show that older workers with poor health actually do not prefer retirement leisure that much and are more worried about retirement life. The findings suggest that older workers with poor health derive lower relative utility from leisure and higher relative utility from work/consumption. Given that poor health is associated with a relatively lower preference for leisure than for work/consumption, the early retirement behavior of older workers with poor health might be due to factors other than preferences, namely the two other channels: poor health depressing wages and poor health as an indicator of shorter life expectancy.