The Effect on Mental Health of Retiring During the Economic Crisis

31 Pages Posted: 23 Dec 2015

See all articles by Michele Belloni

Michele Belloni

University of Turin; Center for Research on Pensions and Welfare Policies (CeRP); Netspar

Elena Meschi

Ca Foscari University of Venice

Giacomo Pasini

Ca' Foscari University of Venice; Netspar

Date Written: December 4, 2015

Abstract

This paper investigates the causal impact of retirement on late-life mental health, a growing concern for public health, since major depressive disorders are the second leading cause of disability. We shed light on the role of economic conditions in shaping the effect of retirement on mental health by exploiting time and regional variation in the severity of the economic crisis across 10 European countries during 2004-2013. We use data from four waves of the Survey of Health, Ageing and Retirement in Europe and address the potential endogeneity of the retirement decision to mental health by applying a fixed effects instrumental variable approach. The results indicate that retirement improves the mental health of men but not that of women. This effect is stronger for blue collar men working in regions that have been severely hit by the economic crisis. These findings may be explained by the worsening of working conditions and the rise in job insecurity stemming from the economic downturn: Under these circumstances, exit from the labour force is perceived as a relief.

Keywords: Depression, stress, working conditions, retirement, IV fixed effect, recession

Suggested Citation

Belloni, Michele and Meschi, Elena and Pasini, Giacomo, The Effect on Mental Health of Retiring During the Economic Crisis (December 4, 2015). Netspar Discussion Paper No. 12/2015-040, Available at SSRN: https://ssrn.com/abstract=2707058 or http://dx.doi.org/10.2139/ssrn.2707058

Michele Belloni (Contact Author)

University of Turin ( email )

Lungo Dora Siena 100
Torino, 10153
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Elena Meschi

Ca Foscari University of Venice

Dorsoduro 3246
Venice, Veneto 30123
Italy

Giacomo Pasini

Ca' Foscari University of Venice ( email )

Cannaregio 873
Venice, 30121
Italy
+39 041 234 9171 (Phone)
+39 041 2349176 (Fax)

HOME PAGE: http://https://sites.google.com/unive.it/pasini

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.netspar.nl/people/researchfellows/pasini/

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