Retirement and Healthcare Utilization: Evidence from Pension Eligibility Ages in South Korea

Abstract

This paper investigates how crossing normal pension eligibility ages affects retirement and healthcare utilization by using the exogenous rule for the public pension benefit and a dataset for the elderly population from South Korea – one of the developed Asian countries. To overcome selection bias, I rely on a regression discontinuity design (RDD) to compare the outcomes of those barely above and below eligibility age thresholds. By using aggregate measures of healthcare utilization, I find that retirement increases inpatient care utilization, while it has a negative but statistically insignificant effect on outpatient care utilization. These results are qualitatively consistent with previous studies in the developing country finding that retirement has a positive impact on inpatient care utilization.

Keywords: Pension, Retirement, Healthcare Utilization, Regression Discontinuity Design

JEL Classification: H55, I11, I12, J26