The effect of involuntary retirement on healthcare use

We analyze the causal effect of involuntary retirement on detailed indicators of healthcare use and mortality. We leverage a pension reform in Hungary which forced public sector workers above the statutory retirement age to full time retirement. Using rich administrative data, we find that on the 3-year horizon, involuntary retirement decreases the number of primary care doctor visits, the use of systemic antiinfectives and respiratory drugs, and the non-zero spending on antiinfectives, the drugs of the alimentary tract and metabolism and of the cardiovascular system. The impact on the latter two drug categories is driven by the drop in income due to involuntary retirement. We conclude that there is little evidence for health deteriorating effects of involuntary retirement and discuss the possible mechanisms behind our results.