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Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control

Author

Listed:
  • Andrew E Clark

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Rong Zhu

    (Flinders University [Adelaide, Australia], IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics)

Abstract

We use nationally representative panel data from Australia to consider the impact of retirement on individual locus of control, a socio-emotional skill that has substantial explanatory power for a broad range of life outcomes. We establish causality via cohort-specific eligibility age for the Australian Age Pension. We show that retirement leads to increased internal locus of control. This greater sense of internal control can explain around one-third and one-fifth of the positive effects of retirement on health and subjective well-being, respectively. The impact of retirement on control beliefs varies along the distribution of locus of control, with the positive influence being most pronounced for men with a relatively high sense of internal control and for women with a relatively high sense of external control. Last, we provide evidence that locus of control is much more malleable at retirement than the other socio-emotional skills of the Big-Five personality traits, risk and time preferences, and trust.

Suggested Citation

  • Andrew E Clark & Rong Zhu, 2023. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," Working Papers halshs-04335808, HAL.
    • Handle: RePEc:hal:wpaper:halshs-04335808
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04335808v1
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    2. Nguyen, Ha & Schurer, Stefanie & Mitrou, Francis, 2025. "The instability of locus of control: New evidence from the distributional effects of major life events," MPRA Paper 126016, University Library of Munich, Germany, revised Jul 2025.
    3. Kasinger, C. & Kriechel, L. & Hahm, S. & Reinwarth, A. & Strauss, B. & Beutel, M. & Brähler, E. & Altweck, L., 2025. "Trajectories of health-related quality of life across age cohorts: A longitudinal analysis of the German population over 16 years," Social Science & Medicine, Elsevier, vol. 366(C).
    4. Nguyen, Ha Trong & Mitrou, Francis, 2025. "Extreme weather events, home damage, and the eroding locus of control," Ecological Economics, Elsevier, vol. 235(C).
    5. Ha Trong Nguyen & Schurer, Stefanie & Mitrou, Francis, 2024. "The (in)stability of locus of control: New insights from distributional effects of major life events," GLO Discussion Paper Series 1532, Global Labor Organization (GLO).

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    Keywords

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    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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