The Role of Retiree Health Insurance in the Employment Behavior of Older Men

57 Pages Posted: 17 Nov 2003  

David M. Blau

University of North Carolina (UNC) at Chapel Hill - Department of Economics; IZA Institute of Labor Economics

Donna B. Gilleskie

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: November 2003

Abstract

We model the employment and medical care decisions of older men who face health risk. The budget constraint incorporates detailed characteristics of health insurance as well as Social Security and private pensions. A man whose health insurance is tied to continued employment with his current employer faces the risk of large medical expenditures in the event of an adverse health shock if he retires before becoming eligible for Medicare at age 65. A man whose employer provides retiree health insurance or who has access to other health insurance not tied to his employment decision (e.g., from his wife) can retire before age 65 without consequences for his health insurance coverage. We use data from the Health and Retirement Survey to estimate the parameters of the model using structural methods. Simulations based on the estimates imply that changes in health insurance, including access and restrictions to retiree health insurance and Medicare have a modest impact on employment behavior among older males.

Suggested Citation

Blau, David M. and Gilleskie, Donna B., The Role of Retiree Health Insurance in the Employment Behavior of Older Men (November 2003). NBER Working Paper No. w10100. Available at SSRN: https://ssrn.com/abstract=468787

David M. Blau

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Gardner Hall
Chapel Hill, NC 27599
United States
919-966-3962 (Phone)
919-966-4986 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Donna B. Gilleskie (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

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