Retiree Health Benefits and Retirement

Upjohn Institute Staff Working Paper No. 06-128

36 Pages Posted: 10 Aug 2006

See all articles by Stephen Woodbury

Stephen Woodbury

Michigan State University; W.E. Upjohn Institute for Employment Research

James Marton

University of Kentucky - Martin School of Public Policy and Administration

Date Written: July 2006

Abstract

Employer-provided health benefit coverage for workers who retire before age 65 has fallen over the last decade. We examine a cohort of male workers from the Health and Retirement Survey to examine questions about the dynamics of retiree health benefits and the relationship between retiree health benefits and retirement behavior, which is important for the debate over increasing health coverage for older Americans without reducing work incentives. On dynamics, we find that between 1992 and 1996, 24 percent of full-time workers who had retiree health benefits lost their coverage, while 15 percent of full-time workers who lacked coverage gained it. Also, of the full-time employed men who were covered by retiree health benefits in 1992 and had retired by 1996, 3 percent were uninsured, and 15 percent were covered by health insurance other than employer-provided insurance. On the relationship between retiree health benefits and retirement, we find that workers with retiree benefits were 29 to 55 percent more likely to retire than those without. We also find that workers who are eligible for retiree health benefits tend to take advantage of them when they are relatively young.

Keywords: health insurance, employee benefits, retirement, elderly, employment, retiree health benefits

JEL Classification: J26, J32, J33, I18, M52

Suggested Citation

Woodbury, Stephen and Marton, James, Retiree Health Benefits and Retirement (July 2006). Upjohn Institute Staff Working Paper No. 06-128. Available at SSRN: https://ssrn.com/abstract=923529 or http://dx.doi.org/10.2139/ssrn.923529

Stephen Woodbury (Contact Author)

Michigan State University ( email )

East Lansing, MI 48824
United States
517-355-4587 (Phone)
517-432-1068 (Fax)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States
269-343-5541 (Phone)

James Marton

University of Kentucky - Martin School of Public Policy and Administration ( email )

Lexington, KY 40506
United States

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