Dynamic Changes in Determinants of Inequalities in Health in Europe with Focus on Retired - With Particular Regard to Retired Danes

Abstract

Earlier studies of health inequality across European countries have shown intriguing results, in particular with respect to retirement status as one of the determinants of health inequality. A priori, one would expect that inequality in health and income would be associated. Theory suggests that health deteriorates with age, in particular for low income groups. Moreover, as income declines after retirement, elderly people tend to rank lower in the relative income ranking. Consequently, retirement status, and in particular early retirement due to health problems, is expected to contribute to inequalities in income-related inequalities in health. The present paper contributes to previous knowledge by looking further into the contribution by retired Europeans to income-related inequalities in health and the development in this contribution over time. The study is based on data from the first and the fourth waves of the Survey of Health, Ageing and Retirement in Europe (SHARE), including individuals born in 1954 or earlier (wave 1) and 1960 or earlier (wave 2) from 10 European countries. Income-related inequality in health is measured using the concentration index. A decomposition of the index into its determinants allows a calculation of the contribution of each determinant’s separate contribution to inequality in health. The results presented here indicate that retirement status contributes substantially to income-related inequality in health across European countries, and that the variation can be explained by income differences as well as health differences, depending on the country considered. Furthermore, it is indicated that the contribution from retirement status falls for certain countries due to improved socioeconomic status as well as improved health of the retired.

Keywords: Health inequality, retirement, SHARE data

JEL Classification: I14, J26