LAUSR

Reduced muscle strength is an accurate predictor of functional limitations, disability, and mortality. Hence, understanding which socio-economic factors contribute to preserve muscle strength in old age is central to the design of social policies that help reducing these health risks. Using data on handgrip strength collected by the Survey of Health, Ageing and Retirement in Europe for the population of Europeans aged 50+ and the exogenous variation in pension eligibility age across countries over time, we estimate that the retirement transition has a short-term positive causal effect on muscle strength. However, this protective effect is not persistent, as retirement speeds up the age-related trend in muscle strength loss, especially for blue-collar workers and males. The "holy grail" of early retirement may not be such a good deal for retirees' longevity and physical functioning late in life.