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This paper explores the relationship between the prolongation of working life and subjective health. Drawing on a unique combination of longitudinal data and the results of a postal survey in Sweden, we investigate the health consequences of extending working life beyond the normal retirement age of 65. To do this, we compare the health status of two groups of retired people: one group who left the labour market completely at the age of 65, and a second group who remained in employment after the age of 65. Using a standard linear probability model and controlling for a range of socio-economic variables as well as previous labour market experiences, perceived life expectancy, pre-retirement income and health, our estimations show that those continuing to work after 65 on average display a 6.8% higher probability of reporting better health during retirement than those leaving at the age of 65. However, we find that this positive correlation between the extension of working life and health is only transitory. After 6 years of retirement, the health advantage of working after the normal retirement age disappears. Furthermore, we did not find any evidence that working after the age of 65 is positively correlated with physical fitness, self-reported depressive symptoms or well-being.

In this paper, we analyze exits from long-term sickness spells in Sweden. Using data for more than 2,500 people, the aim is to analyze the transition to different states: return to work, full disability pension, partial disability pension, and other exits from the labor force. Given the complexity of the exit decision, which encompasses both the individual's choice, the medical evaluation and the decision of the insurance adjudicator, we consider the outcome as being the result of two aspects of the exit process: one that governs the duration of a spell prior to the decision to exit, and another that governs the type of exit. Therefore, the analysis is done in two steps: first, we analyze the duration of the sickness spells, and then we analyze the process that governs the type of exit. The results indicate that both individual characteristics and push factors, such as regional unemployment, are important for both components of the decision process.