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Subjective Well-Being Around Retirement

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  • Marzieh Abolhassani

    ()

  • Rob Alessie

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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

Suggested Citation

  • 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. 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.
    2. Raab, Roman, 2016. "Workplace perception and job-satisfaction of older workers," MPRA Paper 70917, University Library of Munich, Germany.
    3. Adrian Chadi & Clemens Hetschko, 2017. "Income or Leisure? On the Hidden Benefits of (Un-) Employment," IAAEU Discussion Papers 201706, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    4. 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).

    More about this item

    Keywords

    Subjective well-being; Retirement; Panel data; Forecast error; J26; J14;

    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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