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Retirement blues.

Gabriel Heller-Sahlgren1

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|May 16, 2017
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Summary
This summary is machine-generated.

Retirement has no immediate effect on mental health, but a significant negative impact emerges over the long term. Postponing retirement may benefit elderly mental well-being and reduce healthcare costs.

Keywords:
Instrumental variablesMental healthRetirementSHARE

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Area of Science:

  • Gerontology
  • Public Health
  • Health Economics

Background:

  • Retirement transitions significantly impact individuals' lives.
  • Understanding the long-term mental health consequences of retirement is crucial for public health policy.
  • Existing research has not fully addressed the lagged effects of retirement on mental well-being.

Purpose of the Study:

  • To analyze the short- and longer-term effects of retirement on mental health across ten European countries.
  • To investigate the impact of retirement on mental health, considering potential endogeneity in retirement decisions.
  • To provide evidence for policy reforms related to state pension ages and their health implications.

Main Methods:

  • Utilized an instrumental variable approach with individual fixed effects, drawing on regression discontinuity design principles.
  • Exploited variation in state pension ages to address endogeneity in retirement timing.
  • Analyzed data from ten European countries to assess retirement's impact on mental health.

Main Results:

  • No significant short-term effects of retirement on mental health were observed.
  • A substantial negative impact on mental health was found in the longer term after retirement.
  • These findings were consistent across genders and different educational and occupational groups.

Conclusions:

  • Retirement's mental health consequences are primarily long-term, not immediate.
  • Policies encouraging later retirement could yield long-term mental health benefits for the elderly.
  • Postponing retirement may contribute to improved public health and reduced healthcare expenditures.