Does Retirement Induced through Social Security Pension Eligibility Influence Subjective Well-being? A Cross-Country Comparison
How does retirement influence subjective well-being? Some studies suggest retirement does not affect subjective well-being or may improve it. Others suggest it adversely affects it. This paper aims at advancing our understanding of the effect of retirement on subjective well-being by (1) using longitudinal data to tease out the retirement effect from age and cohort differences; (2) using instrumental variables to address potential reverse causation of subjective well-being on retirement decisions; and (3) conducting cross-country analyses, exploiting differences in eligibility ages for retirement benefits across countries and within countries. We use panel data from the US Health and Retirement Study and the Survey of Health, Ageing, and Retirement in Europe. This allows us to use a quasi-experimental approach where variations in public pension eligibility due to country and cohort specific retirement ages help identify retirement effects. For both the U.S. and Europe we find that retirement is associated with higher levels of depression. However, when we use instrumental variables we find the opposite result. Retirement induced through Social Security pension eligibility is found to have a positive effect, reducing depression symptoms, although only marginally significant for the U.S. when considering the depression indicator. Retirement is not found to have a significant effect on life satisfaction measures for either the U.S. or Europe.
|Date of creation:||Oct 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (734) 615-0422
Fax: (734) 647-4575
Web page: http://www.mrrc.isr.umich.edu/publications/papers/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andries De Grip & Maarten Lindeboom & Raymond Montizaan, 2012.
"Shattered Dreams: The Effects of Changing the Pension System Late in the Game,"
Royal Economic Society, vol. 122(559), pages 1-25, 03.
- Grip Andries de & Lindeboom Maarten & Montizaan Raymond, 2009. "Shattered Dreams: The Effects of Changing the Pension System Late in the Game," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
- de Grip, Andries & Lindeboom, Maarten & Montizaan, Raymond, 2009. "Shattered Dreams: The Effects of Changing the Pension System Late in the Game," IZA Discussion Papers 4034, Institute for the Study of Labor (IZA).
- Grip Andries de & Lindeboom Maarten & Montizaan Raymond, 2009. "Dreams: The Effects of Changing the Pension System Late in the Game," Research Memorandum 043, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Coe, Norma B. & Zamarro, Gema, 2011.
"Retirement effects on health in Europe,"
Journal of Health Economics,
Elsevier, vol. 30(1), pages 77-86, January.
- Tinbergen, Jan, 1991. "On the measurement of welfare," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 7-13, October.
- Asghar Zaidi & Aaron George Grech & Michael Fuchs, 2006.
"Pension policy in EU25 and its possible impact on elderly poverty,"
LSE Research Online Documents on Economics
6225, London School of Economics and Political Science, LSE Library.
- Michael Fuchs & Aaron George Grech & Asghar Zaidi, 2006. "Pension Policy in EU25 and its Possible Impact on Elderly Poverty," CASE Papers case116, Centre for Analysis of Social Exclusion, LSE.
- Maximiliane E. Szinovacz & Adam Davey, 2004. "Retirement Transitions and Spouse Disability: Effects on Depressive Symptoms," Journals of Gerontology: Series B, Gerontological Society of America, vol. 59(6), pages S333-S342.
- Viola Angelini & Agar Brugiavini & Guglielmo Weber, 2009. "Ageing and unused capacity in Europe: is there an early retirement trap?," Economic Policy, CEPR;CES;MSH, vol. 24, pages 463-508, 07.
- Richard Easterlin, 2005. "Feeding the Illusion of Growth and Happiness: A Reply to Hagerty and Veenhoven," Social Indicators Research, Springer, vol. 74(3), pages 429-443, December.
- repec:pri:cheawb:deaton_income_health_and_wellbeing_around_the_world_evidence_%20from_gallup_world_poll_jep_spring2008 is not listed on IDEAS
- Angus Deaton, 2008.
"Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll,"
Journal of Economic Perspectives,
American Economic Association, vol. 22(2), pages 53-72, Spring.
- Johnston, David W. & Lee, Wang-Sheng, 2009. "Retiring to the good life? The short-term effects of retirement on health," Economics Letters, Elsevier, vol. 103(1), pages 8-11, April.
- Gary V. Engelhardt & Jonathan Gruber & Cynthia D. Perry, 2005. "Social Security and Elderly Living Arrangements: Evidence from the Social Security Notch," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
When requesting a correction, please mention this item's handle: RePEc:mrr:papers:wp301. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (MRRC Administrator)
If references are entirely missing, you can add them using this form.