Stress and Retirement

33 Pages Posted: 22 Mar 2021

See all articles by Raquel Fonseca

Raquel Fonseca

University of Québec at Montréal

Hugo Morin

University of Quebec at Montreal (UQAM) - Université du Québec à Montréal

Ana I. Moro‐Egido

University of Granada

Date Written: March 11, 2021

Abstract

This paper investigates the bi-directional causal relationship between retirement and stress. We use PSID data for the period 2007-2015. Using a simultaneous equations approach, we find that a rise in stress increases the probability to retire by roughly 15.4 percentage points, while retirement decreases stress by 34.5 percentage points. We find the same results when we disaggregate by individuals’ characteristics, but the former effect is stronger for males, for people working in typical blue-collar jobs, and for people whose wealth is below the mean; while the latter is stronger for males, for white-collar workers, for people whose wealth is above the mean, and for white individuals. We show that official retirement ages are a strong instrument for actual retirement age, and that lagged physical activity levels are a non-linear instrument for perceived stress. We also confirm that objective measures of mental health are a strong instrument for perceived stress.

Keywords: Stress, Retirement, Physical Activity, Simultaneous Equation Models

JEL Classification: C30, I10-12, J26

Suggested Citation

Fonseca, Raquel and Morin, Hugo and Moro‐Egido, Ana I., Stress and Retirement (March 11, 2021). Available at SSRN: https://ssrn.com/abstract=3802860 or http://dx.doi.org/10.2139/ssrn.3802860

Raquel Fonseca (Contact Author)

University of Québec at Montréal ( email )

Hugo Morin

University of Quebec at Montreal (UQAM) - Université du Québec à Montréal ( email )

CP 8888 Succ Centre Ville
Montréal, Québec H3C3P8
Canada

Ana I. Moro‐Egido

University of Granada ( email )

C/Rector López Argueta S/N
Granada, 18071
Spain

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