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Retirement Blues

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Abstract

This paper analyses the short- and longer-term effects of retirement on mental health in ten European countries. It exploits thresholds created by state pension ages in an individual-fixed effects instrumental-variable set-up, borrowing intuitions from the regression-discontinuity design literature, to deal with endogeneity in retirement behaviour. The results display no short-term effects of retirement on mental health, but a large negative longer-term impact. This impact survives a battery of robustness tests, and applies to women and men as well as people of different educational and occupational backgrounds similarly. Overall, the findings suggest that reforms inducing people to postpone retirement are not only important for making pension systems solvent, but with time could also pay a mental health dividend among the elderly and reduce public health care costs.

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  • Heller Sahlgren, Gabriel, 2016. "Retirement Blues," Working Paper Series 1114, Research Institute of Industrial Economics, revised 17 May 2017.
  • Handle: RePEc:hhs:iuiwop:1114
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:eee:jhecon:v:58:y:2018:i:c:p:215-227 is not listed on IDEAS
    2. Thomas Barnay & Eric Defebvre, 2018. "Retired, at last? The short-term impact of retirement on health status in France," TEPP Working Paper 2018-01, TEPP.
    3. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute of Labor Economics (IZA).
    4. Dang, Thang, 2017. "The Causal Effect of Retirement on Health Services Utilization: Evidence from Urban Vietnam," MPRA Paper 79693, University Library of Munich, Germany.
    5. repec:iza:izawol:journl:y:2018:n:430 is not listed on IDEAS
    6. Birgit Leimer, 2017. "No “Honeymoon Phase” Whose health benefits from retirement and when," Working Papers 1718, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    7. Bertoni, Marco & Brunello, Giorgio & Mazzarella, Gianluca, 2018. "Does postponing minimum retirement age improve healthy behaviors before retirement? Evidence from middle-aged Italian workers," Journal of Health Economics, Elsevier, vol. 58(C), pages 215-227.
    8. repec:spr:jopoec:v:31:y:2018:i:1:d:10.1007_s00148-017-0664-x is not listed on IDEAS
    9. Kuusi, Tero & Martikainen, Pekka & Valkonen, Tarmo, 2019. "The Influence of Old-age Retirement on Health: Causal Evidence from the Finnish Register Data," ETLA Working Papers 67, The Research Institute of the Finnish Economy.
    10. repec:spr:eujhec:v:20:y:2019:i:3:d:10.1007_s10198-018-1005-z is not listed on IDEAS
    11. Hagen, Johannes, 2016. "What are the Health effects of postponing retirement? An instrumental variable approach," Working Paper Series 2016:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Messe, Pierre-jean & Wolff, François-Charles, 2017. "Healthier when retiring earlier? Evidence from France," CEPREMAP Working Papers (Docweb) 1703, CEPREMAP.

    More about this item

    Keywords

    Mental Health; Retirement; SHARE; Instrumental Variables;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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