Men and women of working age in regional Australia are significantly more likely to have retired for health reasons than their urban counterparts, according to a new study released by the University of Sydney.

"We believe this study, recently published in the Journal of Public Health, is the first to examine in detail the relationship between where people live and their full or partial retirement due to ill-health," said lead author Dr Sabrina Pit, from the University's Centre for Rural Health," the report's lead author Sandra Pit said.

The research also investigates which of a wide range of health problems are more likely to be associated with full and partial early retirement.

"Our findings could be used by health practitioners, governments and employers to address specific health problems and reduce early retirement due to ill health, particularly in areas outside capital cities," Dr Pit said.

Men and women living outside major cities were more likely to be fully retired due to ill-health than people in major cities and men from outer regional areas were more likely to be partially retired due to ill-health than their city counterparts.

The proportion of working aged men fully retired due to ill-health in cities is five percent, eight percent for inner regional areas and nine for outer regional areas. For fully retired working aged women the percentages were four percent for the city, five percent for inner regional and six percent for outer regional areas.

"Our study found that the largest association with early retirement due to ill-health for men and women was stroke, followed by 'other' cancers (cancers other than melanoma, skin and breast cancer).

"Retirement is influenced by a multitude of factors of which health is one. While delaying retirement is not always in the best interest of those suffering illness, or their employers, we need to find better ways to keep people with health problems in the workforce," said Dr Pit.

"Our research could inform health policies for mature-age workers aimed at reducing early retirement. Government spending on pensions and disability payments could be reduced by putting in place more programs that specifically address health problems leading to early retirement."

Another strategy suggested by the researchers is that employers and occupational health and safety officers could make work environments more suitable for people with specific health problems.