The effect of retirement on the health of elderly people: evidence from China

Abstract The low retirement age has imposed a heavy economic burden on the pension system in China, leading to an ongoing debate about raising the retirement age. To understand the potential costs of raising the retirement age, we need to consider the health effects of retirement policies. Using the China Health and Retirement Longitudinal Study (CHARLS) from 2011 to 2015, this study employs the statutory retirement age as the exogenous variable of retirement and applies a fuzzy regression discontinuity design (RDD) to examine the effect of retirement on the health of Chinese elderly people. We find that retirement has a non-significant effect on health with respect to a series of health indicators, different bandwidths of RDD and sub-sample groups. The finding is also robust across different retirement definitions and retirement ages. This result may be attributed to the minimal changes in income and lifestyles before and after retirement. Moreover, the findings of this study provide important evidence for policy makers to increase retirement ages in China.