Abstract
Increase in the elderly population and early retirement imposes immense economic burden on societies. Previous studies on the association between medical expenditure and working status in the elderly population have not adequately addressed reverse causality problem. In addition, the pre-elderly group has hardly been discussed in this regard. This study assessed possible causal association between employment status and medical expenditure as well as employment status and medical unmet needs in a representative sample of the Korean elderly (aged≧65) and the pre-elderly (aged ≧50 and < 65) adults from the Korea Health Panel Data (KHP). Dynamic panel Generalized Method of Moments (GMM) estimation was employed for the analysis of medical expenditure to address reverse causality, and fixed effect panel logistic regression was used for the analysis of unmet need. The results showed no significant association between job status and medical expenditure in the elderly, but a negative and significant influence on the level of medical expenditure in the pre-elderly. Unemployment was a significant determinant of lowering unmet need from lack of time while it was not associated with unmet need from financial burden in the fixed-effect panel model for both the elderly and pre-elderly groups. The pre-elderly adults were more likely to reduce necessary health service utilization due to unemployment compared to the elderly group because there is no proper financial safety net for the pre-elderly, which may cause non-adherence to treatment and therefore lead to negative health effects. The policy dialogue on safety net currently centers only on the elderly, but should be extended to the pre-elderly population.