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Subjective Well-Being Around Retirement

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  • Marzieh Abolhassani
  • Rob Alessie

Abstract

This paper studies the effect of both retirement and unemployment on life satisfaction, using subjective satisfaction indicators from the German Socio-Economic Panel. Moreover, we analyze how accurate individuals anticipate changes in satisfaction around retirement, as well as the correlation between the forecast error in life satisfaction and the labor market status. Being unemployed has a significant negative effect on life satisfaction; (in)voluntary retirement on the other hand has no significant effect on life satisfaction. A new finding is that unemployed individuals underestimate future life satisfaction. That is, their current labor market status has temporary negative effects on well-being, but, after 5 years, individuals are happier with their life than previously anticipated. We find no effects of (in)voluntary retirement on the forecast error. Copyright Springer Science+Business Media New York 2013

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  • Marzieh Abolhassani & Rob Alessie, 2013. "Subjective Well-Being Around Retirement," De Economist, Springer, vol. 161(3), pages 349-366, September.
    • Handle: RePEc:kap:decono:v:161:y:2013:i:3:p:349-366
    DOI: 10.1007/s10645-013-9209-1
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    Cited by:

    1. Nguyen, Ha Trong & Mitrou, Francis & Taylor, Catherine L. & Zubrick, Stephen R., 2020. "Does retirement lead to life satisfaction? Causal evidence from fixed effect instrumental variable models," GLO Discussion Paper Series 536, Global Labor Organization (GLO).
    2. Roman Raab, 2020. "Workplace Perception and Job Satisfaction of Older Workers," Journal of Happiness Studies, Springer, vol. 21(3), pages 943-963, March.
    3. Viola Angelini & Laura Casi & Luca Corazzini, 2015. "Life satisfaction of immigrants: does cultural assimilation matter?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(3), pages 817-844, July.
    4. Liisa-Maria Palomäki, 2019. "Does It Matter How You Retire? Old-Age Retirement Routes and Subjective Economic Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(2), pages 733-751, April.
    5. Mattia Filomena & Matteo Picchio, 2023. "Retirement and health outcomes in a meta‐analytical framework," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1120-1155, September.
    6. Marco Bertoni & Luca Corazzini, 2015. "Life Satisfaction and Endogenous Aspirations," SOEPpapers on Multidisciplinary Panel Data Research 761, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Matteo Picchio & Jan C. van Ours, 2020. "Mental Health Effects of Retirement," De Economist, Springer, vol. 168(3), pages 419-452, September.
    8. Raab, Roman, 2016. "Workplace perception and job-satisfaction of older workers," MPRA Paper 70917, University Library of Munich, Germany.
    9. Adrian Chadi & Clemens Hetschko, 2017. "Income or Leisure? On the Hidden Benefits of (Un-)Employment," CESifo Working Paper Series 6567, CESifo.
    10. Radó, Márta & Boissonneault, Michaël, 2020. "Short and long-term change in subjective well-being among voluntary and involuntary retirees," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    11. Marco Bertoni & Luca Corazzini, 2018. "Asymmetric affective forecasting errors and their correlation with subjective well-being," PLOS ONE, Public Library of Science, vol. 13(3), pages 1-22, March.
    12. Lieze Sohier & Luc Van Ootegem & Elsy Verhofstadt, 2021. "Well-Being During the Transition from Work to Retirement," Journal of Happiness Studies, Springer, vol. 22(1), pages 263-286, January.

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    More about this item

    Keywords

    Subjective well-being; Retirement; Panel data; Forecast error; J26; J14;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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