The Effect of Retirement on Health in Russia

In the light of recently enacted pension reform, understanding the effect of the retirement on health in Russia becomes an issue of paramount social and political importance. At the same time, causality is difficult to infer, given that retirement is endogenous with respect to health. This paper addresses the health consequences of retirement via empirical analysis of comprehensive data from Russian Longitudinal Monitoring Survey spanning the period from 2000 to 2015. Implementing fuzzy regression discontinuity design and exploiting retirement eligibility as an exogenous instrument for retirement status allows to disentangle moderate positive effect of retirement on health that survives a battery of robustness checks. Heterogeneity analysis shows that the effect is mainly driven by individuals retiring from strenuous jobs and by men. Those experience a significant recovery of health, captured by self-assessed heath, physical and mental health indicators, as they withdraw from the labor force. Although further analysis remains silent about the mechanisms underlying this relationship, the findings suggest that the key channel through which retirement improves health is a relief from occupational strain.