How Does Retiree Health Insurance Influence Public Sector Employee Saving?
Economic theory predicts that employer-provided retiree health insurance benefits crowd-out household wealth accumulation. Nevertheless, there is little research on the impacts of retiree health insurance on wealth accruals, so this paper utilizes a unique data file on three baseline cohorts from the Health and Retirement Study to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. We find that most full-time public sector employees who anticipate receiving employer-provided health insurance coverage in retirement save less than their private sector uncovered counterparts.
The research reported herein was performed pursuant to a grant from the Smith Richardson Foundation to the National Bureau of Economic Research; additional research support was provided by the Pension Research Council/Boettner Center at The Wharton School of the University of Pennsylvania. The authors have benefitted from helpful discussions with Jeffrey Brown, Michael Hurd, Joe Newhouse, Joshua Rauh, John Shoven, and Sita Slavov. They greatly appreciate the excellent programming assistance of Yong Yu. Opinions and errors are solely those of the authors and not of the institutions with whom the authors are affiliated. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Olivia S. Mitchell
Mitchell serves as a Trustee for the Wells Fargo Advantage Funds and has received more than $10,000 from the TIAA-CREF Institute and RAND for research studies on retirement security.
How Does Retiree Health Insurance Influence Public Sector Employee Saving?, Robert L. Clark, Olivia S. Mitchell. in State and Local Health Plans for Active and Retired Public Employees, Clark and Newhouse. 2014
Clark, Robert L. & Mitchell, Olivia S., 2014. "How does retiree health insurance influence public sector employee saving?," Journal of Health Economics, Elsevier, vol. 38(C), pages 109-118. citation courtesy of