The continuously aging population puts strain on social and welfare systems. This has led to many countries, including Sweden, to develop policies to encourage people to delay retirement and extend their working life. However, the discussion about delaying retirement often overlooks potential health inequalities. Previous studies examining the impact of retirement on physical health have shown mixed results, which may be due to socioeconomic differences or because of insufficiently addressing factors preceding retirement. Age of retirement is dependent on various factors such as health, financial security and socioeconomic status, lifestyle, spousal retirement and family circumstances. Individuals with high socioeconomic status (SES) who extend their working lives may have better working conditions, while those with poor with low SES may extend their working life for economic reasons despite health issues or poor working conditions, resulting in poor physical function in old-age. This study examines whether the association between retirement age and late life physical functioning differs by SES. The overall aim is to explore:

–if there is an association between retirement age and late life physical functioning;

–if the association differs by socioeconomic status.

Data are used from two interrelated nationally representative longitudinal studies: The Swedish Level of Living Survey (LNU) and the Swedish Panel Study of Living conditions of the Oldest Old (SWEOLD), linked to annual tax register data. We apply Propensity score matching using a rich set of control variables that are expected to influence both retirement age and late-life health. After successful matching we use Average treatment effects on the treated (ATT) to estimate the effect of prolonging working life on late life health. Finally we carried out a logistic regression analysis with the respective physical health indicator as dependent variable and socioeconomic status as independent variable. We report the marginal effects for the treated (retire after age 65) and untreated individuals (retiring before or at age 65) separately for manual and non-manual workers.

Preliminary results showed that for mobility, musculoskeletal pain, self-rated health and ADL limitations, there are small but significant positive effects of delaying retirement beyond age 65 compared to those who retired earlier. People of lower SES had, in general, worse health outcomes in late life than those of higher SES, and results from stratified analysis by SES showed that manual workers had positive effects of delaying retirement, although the differences were not significant.

This article sought to reveal the causal effects of prolonging working life on individuals’ old-age health. Prolonging working life was generally associated with better physical functioning in later life and did not increase socioeconomic health differences in late life. This could have important policy implications as many countries create policies encouraging older work force to stay in employment.