Retirement blues

•This paper analyses the effects of retirement on mental health in Europe.•Regular state pension ages are used for identification purposes.•We find no short-term effects, but a large negative longer-term impact.•There is no evidence of heterogeneous effects across different groups. This paper analys...

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Bibliographic Details
Published in:Journal of health economics Vol. 54; pp. 66 - 78
Main Author: Heller-Sahlgren, Gabriel
Format: Journal Article
Language:English
Published: Netherlands Elsevier B.V 01.07.2017
Elsevier Sequoia S.A
Subjects:
Age
Age Factors
Aged
Depression - epidemiology
Discontinuity
Educational Status
Europe - epidemiology
Female
Geriatrics
Health behavior
Health care expenditures
Health economics
Health services
Humans
Impact analysis
Instrumental variables
Interviews as Topic
Male
Men
Mental Health
Mental health services
Middle Aged
Occupations - statistics & numerical data
Older people
Pensions - statistics & numerical data
Public health
Reforms
Regression analysis
Retirement
Retirement - psychology
Robustness
SHARE
Thresholds
Europe
Mental health
I10
Instrumental variables
J14
SHARE
Retirement
J26
ISSN:0167-6296, 1879-1646, 1879-1646
Online Access:Get full text
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Summary:•This paper analyses the effects of retirement on mental health in Europe.•Regular state pension ages are used for identification purposes.•We find no short-term effects, but a large negative longer-term impact.•There is no evidence of heterogeneous effects across different groups. 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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ISSN:0167-6296
1879-1646
1879-1646
DOI:10.1016/j.jhealeco.2017.03.007