Health and Retirement

The Effect of changing the Medicare Eligibility Age on the Health of the Near-Retirement Population [Paper]

Raising the eligibility age for Medicare, the third largest program in the federal budget, could lead to a large reduction the federal budget deficit, however, the effect of this change on the health of the near-retirement population is unclear. Using Health and Retirement Study (HRS) dataset, I measure the effect of a change in Medicare eligibility age on the health of the elderly population by estimating a dynamic discrete choice model of health and retirement that endogenizes the health investment decisions. Using Forward Simulation and Conditional Choice Probability estimator (CCP), I incorporate a large, multidimensional state space that helps me to employ a detailed model to address the health and welfare concerns of the change in the eligibility age of the Medicare. I find that labor supply, life expectancy, and mental health will be affected positively in response to an increase in the Medicare eligibility age, the welfare effect, however, is negative and there is some evidence of cost transfers from Medicare to the Social Security Program.

The Effect of Involuntary Layoff on the Health of the Near-Retirement Population

Using developments in structural estimation techniques that reduce computational burden and, by employing the Health and Retirement Survey dataset (HRS), this paper studies the effect of involuntary job loss on the health of near retirement population. Reducing the computational burden allows us to increase state and decision space size to include both health investment and labor supply decisions. More exactly, we will be able to endogenize decisions on consumption level, retirement, social security claiming and four-dimensions of health investment. I make a new health index using Item Response Theory (IRT) and Bayesian approach that enables me to provide health distribution for each individual.