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The Effect on Mental Health of Retiring During the Economic Crisis

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  • Michele Belloni
  • Elena Meschi
  • Giacomo Pasini

Abstract

This paper investigates the causal impact of retirement on late‐life mental health, a growing concern for public health, because major depressive disorders are the second leading cause of disability. We shed light on the role of economic conditions in shaping the effect of retirement on mental health by exploiting time and regional variation in the severity of the economic crisis across 10 European countries during 2004–2013. We use data from four waves of the Survey of Health, Ageing and Retirement in Europe and address the potential endogeneity of the retirement decision to mental health by applying a fixed‐effects instrumental variables approach. The results indicate that retirement improves the mental health of men but not that of women. This effect is stronger for blue‐collar men working in regions that have been severely hit by the economic crisis. These findings may be explained by the worsening of working conditions and the rise in job insecurity stemming from the economic downturn: under these circumstances, exit from the labour force is perceived as a relief. Copyright © 2016 John Wiley & Sons, Ltd.

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  • Michele Belloni & Elena Meschi & Giacomo Pasini, 2016. "The Effect on Mental Health of Retiring During the Economic Crisis," Health Economics, John Wiley & Sons, Ltd., vol. 25(S2), pages 126-140, November.
    • Handle: RePEc:wly:hlthec:v:25:y:2016:i:s2:p:126-140
    DOI: 10.1002/hec.3377
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    Cited by:

    1. Jung, Dain & Kwak, Do Won & Tang, Kam Ki & Yazbeck, Myra, 2022. "Poor Job Conditions Amplify Negative Mental Health Shocks," Labour Economics, Elsevier, vol. 79(C).
    2. Belloni, Michele & Carrino, Ludovico & Meschi, Elena, 2022. "The impact of working conditions on mental health: Novel evidence from the UK," Labour Economics, Elsevier, vol. 76(C).
    3. Manuel Serrano‐Alarcón & Chiara Ardito & Roberto Leombruni & Alexander Kentikelenis & Angelo d’Errico & Anna Odone & Giuseppe Costa & David Stuckler & IWGRH, 2023. "Health and labor market effects of an unanticipated rise in retirement age. Evidence from the 2012 Italian pension reform," Health Economics, John Wiley & Sons, Ltd., vol. 32(12), pages 2745-2767, December.
    4. Carrino, L.; & Nafilyan, V.; & Avendaño Pabon, M.;, 2019. "Should I Care or Should I Work? The Impact of Working in Older Age on Caregiving," Health, Econometrics and Data Group (HEDG) Working Papers 19/23, HEDG, c/o Department of Economics, University of York.
    5. Antoine Bozio & Clémentine Garrouste & Elsa Perdrix, 2021. "Impact of later retirement on mortality: Evidence from France," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1178-1199, May.
    6. Matteo Picchio & Jan C. van Ours, 2020. "Mental Health Effects of Retirement," De Economist, Springer, vol. 168(3), pages 419-452, September.
    7. 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.
    8. Salm, Martin & Siflinger, Bettina & Xie, Mingjia, 2021. "The Effect of Retirement on Mental Health: Indirect Treatment Effects and Causal Mediation," Other publications TiSEM e28efa7f-8219-437c-a26d-2, Tilburg University, School of Economics and Management.
    9. Danilo Cavapozzi & Chiara Dal Bianco, 2020. "Does retirement decrease the familiarity with ICT of older individuals?," Working Papers 2020:01, Department of Economics, University of Venice "Ca' Foscari".
    10. Dain Jung & Do Won Kwak & Kam Ki Tang & Myra Yazbeck, 2021. "How Do Job Conditions Amplify the Impacts of Mental Health Shocks?," Discussion Papers Series 647, School of Economics, University of Queensland, Australia.
    11. Kuusi, T. & Martikainen, P. & Valkonen, T., 2020. "The influence of old-age retirement on health: Causal evidence from the Finnish register data," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    12. Jan C. van Ours, 2022. "How Retirement Affects Mental Health, Cognitive Skills and Mortality; An Overview of Recent Empirical Evidence," De Economist, Springer, vol. 170(3), pages 375-400, August.
    13. Ludovico Carrino & Karen Glaser & Mauricio Avendano, 2020. "Later retirement, job strain, and health: Evidence from the new State Pension age in the United Kingdom," Health Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 891-912, August.
    14. Ludovico Carrino & Vahé Nafilyan & Mauricio Avendano, 2023. "Should I Care or Should I Work? The Impact of Work on Informal Care," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(2), pages 424-455, March.
    15. Bertoni, Marco & Brunello, Giorgio, 2017. "Pappa Ante Portas: The effect of the husband's retirement on the wife's mental health in Japan," Social Science & Medicine, Elsevier, vol. 175(C), pages 135-142.
    16. Carrino, Ludovico & Glaser, Karen & Avendano, Mauricio, 2018. "Later Pension, Poorer Health? Evidence from the New State Pension Age in the UK," MPRA Paper 87575, University Library of Munich, Germany.
    17. Mingming Xu & Benjamin Bittschi, 2022. "Does the abolition of copayment increase ambulatory care utilization?: a quasi-experimental study in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(8), pages 1319-1328, November.
    18. Dino Rizzi & Carlo Simionato & Francesca Zantomio, 2019. "Older People Health and Access to Healthcare: A Retrospective Look at Inequality Dynamics over the Past Decade," Politica economica, Società editrice il Mulino, issue 3, pages 335-366.
    19. Yuxi Wang & Giovanni Fattore, 2020. "The impact of the great economic crisis on mental health care in Italy," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(8), pages 1259-1272, November.
    20. Angelo d’Errico & Chiara Ardito & Roberto Leombruni & Fulvio Ricceri & Giuseppe Costa & Carlotta Sacerdote & Anna Odone, 2022. "Working Conditions and Health Among Italian Ageing Workers," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(3), pages 1043-1067, August.
    21. Johannes Geyer & Mara Barschkett & Peter Haan & Anna Hammerschmid, 2023. "The effects of an increase in the retirement age on health care costs: evidence from administrative data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(7), pages 1101-1120, September.
    22. Barschkett, Mara & Geyer, Johannes & Haan, Peter & Hammerschmid, Anna, 2022. "The effects of an increase in the retirement age on health — Evidence from administrative data," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    23. Lei, Xiaoyan & Liu, Hong, 2018. "Gender difference in the impact of retirement on cognitive abilities: Evidence from urban China," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1425-1446.

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    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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