LAUSR

ABSTRACT This article assessed the effects of retirement on the health of elderly people living in São Paulo, the most populous Brazilian city, from 2000 to 2010. In the context of population ageing, the effects of retirement on the health of elderly people must be understood. Data on elderly people from the municipality of São Paulo were retrieved from the longitudinal database Health, Wellbeing and Ageing Study (SABE). Fixed-effect and instrumental-variable fixed-effect models were estimated to consider the possible simultaneity between the decision to retire and the health status of individuals. The results showed that retirement improves overall health and mobility of men, especially of less-educated workers. This finding suggests that setting a minimum retirement age in Brazil, which will postpone retirement, may worsen the health status of older workers, thereby increasing National Health Service costs. Therefore, this subject must be incorporated into the debates on pension reform in Brazil. In addition, and more generally, this article aims to contribute to the literature by investigating this issue in a developing country.