Retiree Health Insurance and Disengagement from a Career Job

Over the past two decades the prevalence of partial/phased retirements has increased dramatically, redefining retirement and the way in which retirement benefits are evaluated. Specifically the effect of retirement benefits on the transition away from a state of career employment has become the primary issue of interest. This study uses data obtained from the Health and Retirement Study (HRS) and the Rand HRS files, to examine the relationship between access to retiree health insurance (RHI) and the decision to leave one’s career job. We employ a Cox Proportional Hazard Model to estimate how RHI affects the probability that an individual disengages from their career job, given they have not yet done so. Results indicate that those with access to RHI are 21% more likely to leave their career employer in all time periods than similar individuals without RHI. Several robustness tests including stratified estimation and propensity score matching are performed and no evidence of bias is detected.