The Effect of Removing Early Retirement on Mortality

Abstract

This paper studies the mortality effect of delaying retirement by investigating the impacts of the 1967 Spanish pension reform, which affected the general population and exogenously changed the early retirement age by five years, depending on the date individuals started contributing to the pension system. Using Spanish administrative data, we find that removing early retirement access delays the age of last employment by close to half a year and increases the hazard of dying between the ages of 60 and 69 by 22 percent. We show that the reform leads to higher mortality in all subgroups, and the effects are statistically stronger for those employed in sectors with the highest workplace accidents and for those with low self-value jobs. Moreover, we show that allowing flexible retirement mitigates the adverse effects of delaying retirement.

Keywords: Delaying retirement, Early retirement, Mortality, Heterogeneity, Work conditions