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Retirement and subjective well-being

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Author Info

  • Bonsang, Eric
  • Klein, Tobias J.

Abstract

The life cycle model predicts that individuals substitute leisure for consumption when they retire. We show that the effect of retirement on various well-being measures available in the German Socio-Economic Panel (GSOEP) are compatible with this prediction: the overall effect on life satisfaction is negligible, while satisfaction with the free time increases and satisfaction with household income decreases. The life cycle model also predicts that involuntary retirement is likely to have adverse effects because individuals would actually prefer to work in order to consume more, but are prevented from doing so. We find that indeed, involuntary retirement results in an overall negative effect that can partly be explained by a bigger drop in income satisfaction and a smaller increase in satisfaction with the free time.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 83 (2012)
Issue (Month): 3 ()
Pages: 311-329

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Handle: RePEc:eee:jeborg:v:83:y:2012:i:3:p:311-329

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Retirement; Subjective well-being; Satisfaction measurement;

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References

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Citations

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Cited by:
  1. Clemens Hetschko & Andreas Knabe & Ronnie Schöb, 2011. "Changing Identity: Retiring from Unemployment," CESifo Working Paper Series 3540, CESifo Group Munich.
  2. Caroli, Eve & Bassanini, Andrea, 2014. "Is work bad for health? The role of constraint vs choice," Economics Papers from University Paris Dauphine 123456789/12483, Paris Dauphine University.
  3. Marzieh Abolhassani & Rob Alessie, 2013. "Subjective Well-Being Around Retirement," De Economist, Springer, vol. 161(3), pages 349-366, September.

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