Does raising retirement age lead to a healthier transition to retirement? Evidence from the U.S. Social Security Amendments of 1983.

Abstract

Governments are under pressure to raise the retirement age in response to an aging population and low fertility rates. However, the literature has not reached a consistent conclusion on the health effects of extending working lives. Furthermore, while most studies have concentrated on post-retirement health consequences, the health outcomes during the transition from work to retirement have been overlooked. Therefore, this article focuses on the transition period - the time between the early benefit age and full retirement age. Exploiting the increase in retirement age introduced by the U.S. Social Security Amendments of 1983, the difference-in-difference estimation finds that the reform successfully encouraged more people to work longer and claim benefits later, whilst having no adverse influence on health during the transition period. This paper infers that the desirable impacts of the 1983 amendments could be partly attributed to the adequate preparation time the reform left to the public.