The effect of retirement on physical and mental health in China: a nonparametric fuzzy regression discontinuity study.

ABSTRACT

BACKGROUND: With the rapid aging of the domestic population, China has a strong incentive to increase the statutory retirement age. How retirement affects the health of the elderly is crucial to this policymaking. The health consequences of retirement have been debated greatly. This study aims to investigate the effects of retirement on physical and mental health among Chinese elderly people. METHODS: The data we use in this study comes from four waves (2011, 2013, 2015, and 2018) of the Harmonized China Health and Retirement Longitudinal Study (Harmonized CHARLS), a prospective cohort. We use the nonparametric fuzzy regression discontinuity design to estimate the effects of retirement on physical and mental health. We test the robustness of our results with respect to different bandwidths, kernel functions, and polynomial orders. We also explore the heterogeneity across gender and education. RESULTS: Results show that retirement has an insignificant effect on a series of physical and mental health outcomes, with and without adjusting several sociodemographic variables. Heterogeneity exists regarding gender and education. Although stratified analyses indicate that the transition from working to retirement leaves minimal effects on males and females, the effects go in the opposite direction. This finding holds for low-educated and high-educated groups for health outcomes including depression and cognitive function. Most of the results are stable with respect to different bandwidths, kernel functions, and polynomial orders. CONCLUSIONS: Our results suggest that it is possible to delay the statutory retirement age in China as retirement has insignificant effects on physical and mental health. However, further research is needed to assess the long-term effect of retirement on health.