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The Effects of an Increase in the Retirement Age on Health Care Costs: Evidence from Administrative Data

Aufsätze referiert extern - Web of Science

Johannes Geyer, Mara Barschkett, Peter Haan, Anna Hammerschmid

In: The European Journal of Health Economics im Ersch. (2022), [online first: 2022-10-23]

Abstract

In this paper, we use unique health record data that cover outpatient care and the associated costs to quantify the health care costs of a sizable increase in the retirement age in Germany. For the identification, we exploit a sizable cohort-specific pension reform which abolished an early retirement program for all women born after 1951. Our results show that health care costs significantly increase by about 2.9% in the age group directly affected by the increase in the retirement age (women aged 60–62). We further show that the cost increase is mainly driven by the following specialist groups: Ophthalmologists, general practitioners (GPs), neurology, orthopedics, and radiology. While the effects are significant and meaningful on the individual level, we show that the increase in health care costs is modest relative to the positive fiscal effects of the pension reform. Specifically, we estimate an aggregate increase in the health costs of about 7.7 million euro for women born in 1952 aged 60–62 which amounts to less than 2% of the overall positive fiscal effects of the pension reform.

Mara Barschkett

Research Associate in the Public Economics Department

Johannes Geyer

Deputy Head in the Public Economics Department

Peter Haan

Head of Department in the Public Economics Department



JEL-Classification: I10;I12;I18;J14;J18;J26
Keywords: Pension reform, health care costs, difference-in-differences
DOI:
https://doi.org/10.1007/s10198-022-01535-w

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