SeaTE: Subjective ex ante Treatment Effect of Health on Retirement
Matthew D. Shapiro
American Economic Journal: Applied Economics (Forthcoming)
The paper studies the effect of health on work among older workers by eliciting 2- and 4-year-ahead
subjective probabilities of working under alternative health states. These measures predict work outcomes.
Person-specific differences in working probabilities across health states can be interpreted as Subjective
ex ante Treatment Effects (SeaTE) in a potential outcomes framework and as taste for work within a
discrete choice dynamic programming framework. There is substantial heterogeneity in expectations of
work conditional on health. The paper shows how heterogeneity in taste for work correlated with health
can bias regression estimates the effect of health on retirement.