Health, mortality and retirement of the elderly in the United States
Yazbeck, Abdo Sleiman
Doctor of Philosophy
This study builds on an ever growing health demand and retirement literature. I extend the literature on structural models by developing and estimating a stochastic model that jointly considers health status, retirement and consumption in a life-cycle framework. I also use a number of specifications of reduced form models for mortality, morbidity, and labor withdrawal to examine the influence of social and economic factors and to study the difference in the experiences of black and white men. I develop and estimate a model that has the following characteristics: it (a) jointly determines health demand and labor supply, (b) allows the decisions to be made in a life-cycle framework, (c) is set in a stochastic environment, and (d) relaxes the assumption of intertemporally separable preferences by using a dynamic preference structure which incorporates forms of intertemporal nonseparability. Closed-form solutions can only be reached if strong and unrealistic restrictions are imposed on the model. This problem is solved by using generalized method of moments estimation on the set of highly nonlinear Euler equations. I use a number of models to explore black white inequalities in the United States with regard to mortality and morbidity for older men and to study the extent to which such differences are associated with observed differences in socioeconomic characteristics. Two measures of health status are used: a categorical variable of self-assessed health and a continuous variable that combines subjective and objective measures of health status. Within a race, the estimates are robust to changes in statistical specifications. Between races, the estimates differ in magnitude and statistical significance. By using the observed characteristics of black men in the sample in the equations of white men, I find that most of the differences in the health status of the two groups disappears. I estimate five labor withdrawal models at two stages of the life-cycle, early retirement and late retirement. I look at the social and economic determinants of early labor withdrawal and advanced-age work effort for black and white men. I also study the robustness of the relationships between the socioeconomic variables and labor withdrawal as the definition of retirement changes.
Labor economics; Economics; Gerontology