ESRI Discussion Paper Series No.363 Time to See a Doctor: Expenditure at Retirement in Japan

Kento Tango
Graduate School of International Management, Yokohama City University
Yoshiyuki Nakazono
Research Fellow, ESRI; Visiting Associate Professor, Yokohama City University

Abstract

Using household panel data, we test whether there exists an immediate decline in consumption at retirement. We find stark evidence of retirement consumption; there is an immediate decline in expenditure of 2.4% even at expected retirement. The negative effect of retirement on expenditure is persistent, and it lasts for at least two years. However, there is no dip in the consumption of higher-educated households, as is the case with lower-educated households. Further, the decline in consumption of healthcare products such as drugs is severe. Indeed, lower-educated households decrease expenditure on drugs by 25% at most. An additional survey for healthcare use reveals that frequent visits to the doctor explain the decline in expenditure on over-the-counter (OTC) drugs. Our results suggest that the reduced opportunity cost of time to see a doctor induces households at retirement to visit a doctor more often than before and obtain prescribed drugs at more affordable prices than OTC drugs, possibly owing to the universal health insurance system.


Structure of the whole text(PDF-Format 1 File)

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    • 1. Introduction
      page2
    • 2. Existing Literature on Healthcare Consumption at Retirement
      page4
    • 3. Data and Estimation Strategy
      page5
    • 4. Expenditure at Retirement: Estimation Results
      page7
    • 5. Disentangling Price and Quantity Declines
      page10
    • 6. Cause of Falling Expenditure on Healthcare Products at Retirement
      page12
    • 7. Conclusion
      page16