Econstudentlog

Health, Retirement and Mortality (1?)

Some bits from the first chapter of the Phd Thesis by Malene Lamb.

“75% of the males in the sample work full-time, whereas only 54% of the women are employed full-time.”

“Finally, we have information about contributions to both labor market pension schemes and private pension schemes. […] The variables show how much the individual has contributed to the different schemes each year making it a good indicator for how much the individual has put aside to supplement the public retirement schemes. […] Around 95% of the individuals in our sample have made no contributions within a given year to a labor market pension schemes independently of which of the two types we consider. […] For private schemes the picture looks slightly better since ‘only’ 70% have no private capital pension and 75% have no private annuity pension.”

“If the spouse is working full-time it lowers the probability for the individual to enter early retirement. However, this effect only holds for women indicating that women actively participating in the labor market have a lower retirement hazard if their husband works full time. […] A longer spell of illness of the spouse significantly increases the retirement hazard indicating that people may leave the labor market earlier in order to take care of their spouse. Looking at the two sub-samples this effect is only significant for the men. […] In this context it is important to note that free medical care is available to everyone thus not forcing one member of the household to continue working in order to maintain a health insurance.”

“We have […] shown that the husbands’ characteristics do affect the retirement behaviour of their wives differently than the wives’ characteristics affect their husbands. Within all the variable groups (labor market, education, age, occupation, sector, financial indicator, and pension) included in the model we find that spousal differences exists. However we never find opposite significant spousal effects, it is always the case that it is only significant for one of them.

Women’s retirement hazard is affected positively by the husband’s experience, if the husband has a short education compared to basic education, the husband’s high contributions to a labor market capital pension scheme and finally medium or high contributions to a private annuity pension scheme. On the other hand women’s retirement hazard is affected negatively (thus retire later) if the husband works full time, is self-employed or works in construction compared to the public sector. Men’s retirement hazard is affected positively by the wife’s age, labor market pension payments or if she receives sickness benefits. Men retire later if the wife has been unemployed, is high educated, not working as a high-salaried worker, is working in the construction, trade or transport sector compared to the public sector. Overall, we find more significant effects for men indicating that they are more influenced by their spouse in the early retirement decision compared to women. This corresponds to the results found in Gustman and Steinmeier (2000) and Coile (2004).”

Most of this I didn’t know. The sample is based on all Danish workers who were active in the labor market at the age of 50 in 1985 (99.498 individuals) – so many of the results probably don’t hold for the whole population (/entire workforce, all Danes/…). For instance private savings and the level of education are both variables likely to be somewhat higher in the younger cohorts. It seems that a majority in the cohort they looked at didn’t consider it to be necessary to save any money for retirement at all – I was simply flabbergasted when I read those numbers. Though it is worth remembering the role real estate plays in the savings equation (/and of course also the impact of the public pension scheme); in a way it makes more sense for a Dane to implicitly put the savings into the house than it does for an American, as the median Dane will never get into a situation where he or she suddenly needs to raise a lot of money fast to pay for a medical procedure – the liquidity part is much less important.

April 3, 2011 - Posted by | data, economics, health, marriage, studies

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