Smoking and early retirement due to chronic disability

Among individuals aged 50-64 in 2011, a simple model suggested smokers to have a 5 percentage point higher probability of receiving (full) disability pension, making them more than twice as likely as non-smokers to receive this. However, in a model with sibling fixed effects, the size of the effect was reduced by more than a third. The results point to the importance of confounders, such as childhood circumstances or behaviours, which were not accounted for by previous studies. We also consider effects on disability due to different health conditions. In relative terms, effects are the largest for circulatory conditions and tumours. Results are largely driven by health problems severe enough to merit hospitalization, and there is no evidence of a role played by financial incentives.