Do Men Who Work Longer Live Longer? Evidence from the Netherlands

Many countries have adopted policies to encourage people to work longer, which is a powerful lever for improving retirement security. In addition to the financial boost, some research suggests that longer working lives may be beneficial to physical, mental, and cognitive health, by keeping workers active in body and mind. Delayed retirement may also preserve social connections. On the other hand, continued work under stressful or physically demanding conditions may reduce health and could shorten an individual's lifespan. Establishing whether delayed retirement has a positive or negative net effect on health and longevity is crucial to forging an effective and humane retirement policy. This brief, based on a recent study, takes advantage of a policy change in the Netherlands – a tax credit aimed at encouraging Dutch workers to keep working into their mid-60s – to examine the effect of delayed retirement on the most important aspect of health: longevity. The discussion proceeds as follows. The first section explains why a causal effect of delayed retirement on mortality is hard to pin down. The second section describes the Dutch tax policy change, the Doorwerkbonus, and how this natural experiment is used to estimate the causal effect for older men. The third section presents the results on how delayed retirement affects mortality. The final section concludes that men who worked longer due to the policy change saw their mortality rate in their 60s fall from about 8 percent to 6 percent. This result implies about a two-month increase in their life expectancy if the improvement is limited to ages 62-65, but if the impact is longer lasting, it could raise life expectancy more substantially.