1 COHERE, Department of Business and Economics, Faculty of Business and Social Sciences, SDU2 Health Economics, Faculty of Business and Social Sciences, SDU3 IfW4 Health Economics, Faculty of Business and Social Sciences, SDU
Evidence from the German Socio-economic Panel
Using data from the German Socio-economic Panel, we study how stratification in health and income contributes to the social cost of health-related early retirement, the balance of lost labour income and health benefits. On average, early retirees improve their health by almost two thirds of the loss suffered during the last four working years. We calibrate counterfactual scenarios and find keeping all workers in very good health, the highest of five categories of self-assessed health, would delay the average retirement age by more than three years and reduce the social costs by more than 20 percent.