Does Retirement Induced Through Social Security Pension Eligibility Influence Subjective Well-Being? A Cross-Country Comparison

Kapteyn, Arie; Lee, Jinkook; Zamarro, Gema

doi:10.2139/ssrn.2376883

Cited by 10 publications

(14 citation statements)

References 30 publications

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“…Some previous studies have applied the variation of retirement age between countries as an instrumental variable to study the causal effects of retirement (e.g. Fonseca et al, 2014;Horner, 2014;Kapteyn et al, 2013). The application of IV methodology in this research setting would nevertheless prove very difficult, as it is hard to come up with valid instruments for retirement routes that would not be linked with the outcome.…”

Section: Measures and Methodsmentioning

confidence: 99%

“…perspectives of health, psychology (e.g. Van Solinge & Henkens, 2008;Wang, 2007), economics and policy analysis (Bender, 2012;Bonsang & Klein, 2012;Fonseca, Kapteyn, Lee, Zamarro, & Feeney, 2014;Horner, 2014;Kapteyn, Lee, & Zamarro, 2013;Kesavayuth, Rosenman, & Zikos, 2016), but there exists surprisingly little knowledge of the association between retirement and financial satisfaction, which has been proven to increase overall subjective well-being (George, 1992) and at its most extreme, to reduce mortality (Lee & Huang, 2015).…”

Section: Introductionmentioning

confidence: 99%

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Does It Matter How You Retire? Old-Age Retirement Routes and Subjective Economic Well-Being

Palomäki

2018

Soc Indic Res

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the main finding being old-age people's paradoxically high financial satisfaction with relatively low income levels (Hansen, Slagsvold, & Moum, 2008). These studies are mainly crosssectional, which leaves unanswered many of the questions on how changes over time, such as retirement and ageing combined with income change affect financial satisfaction. Retirement has been hypothesized as causing either more or less deprivation than the changes in income would lead one to suspect (Berthoud, Blekesaune, & Hancock, 2009). According to the traditional line of thought, retirement occurs from full-time work to full-time old-age retirement. In reality the transition into old-age retirement takes place through different pathways. Most people in European countries transit from work into old-age retirement between the ages of 50 to 69. But for one in five the path is different, either because they transit into retirement from other statuses or do not actually consider themselves to be retired. (Eurostat, 2015). Older people's decision to withdraw from the labour market is shaped by the institutional setting of social protection domains (pensions, disability and employment), but also by individual and contextual factors (Debrand & Sirven, 2009), creating "pull" and "push" incentives for retirement (e.g. Hofäcker & Unt, 2013). The exit pathways from the labour market are shown to affect short-term life satisfaction (Wetzel, Huxhold, & Tesch-Römer, 2016), but the route in itself has not shown any independent effects on post-retirement health (Halleröd, Örestig, & Stattin, 2013) or later life overall (Hyde, Ferrie, Higgs, Mein, & Nazroo, 2004). Against this background, it is also essential to specify the association between retirement routes and financial satisfaction. This study explores the effect of retirement on individuals' subjective economic well-being in European countries. We distinguish between three different retirement routes, measured with preceding basic activity statuses. The study focuses on the experiences of those who worked and of those who were unemployed before retirement. People with different labour market statuses generally enjoy different levels of well-being, and retirement might have adverse consequences in relation to income level changes and perceived income adequacy. The goal is to find out how different retirement routes are associated with the perceived income adequacy and whether possible differences can be explained with different levels of income change. Retirement is analysed with EU-Silc panel data using individual fixed-effect models. Results are indicative of the short-term effects of different retirement pathways on subjective economic well-being. The following sections present, firstly, the relevant literature on the subject; secondly, the aim of the study, data, measures and methods; thirdly, the results; and finally, a conclusion and discussion of the results.

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Section: Measures and Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does It Matter How You Retire? Old-Age Retirement Routes and Subjective Economic Well-Being

Palomäki

2018

Soc Indic Res

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“…Despite certain drawbacks such as low benefit amount, provincial disparities, insufficient funding and limited pension investment choices, China’s pension schemes, to some extent, have provided a safety net to retirees, which is likely to improve the life satisfaction and quality of life during retirement [4,10]. While retirement itself has been reported to have a multifarious effect on life satisfaction across countries and time spans [20,21,22,23,24], pension insurance coverage on the other hand, has been found to be a likely determinant of the cross-country variations in the relationship between life satisfaction and retirement [24,25]. Generally, pension schemes tend to have a positive effect on the life satisfaction of the elderly [7,24,26,27,28].…”

Section: Public Pension Scheme Intergenerational Assistance and Smentioning

confidence: 99%

Old Age Support in Urban China: The Role of Pension Schemes, Self-Support Ability and Intergenerational Assistance

Abruquah

Yin

Ding

2019

IJERPH

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With the aim of probing into the life satisfaction of retired urban elderly in China with respect to old age support systems, this study examines the effect of pension reform with its existing inequalities across demographic and social groups on the life satisfaction of retired urban residents. The complementary role of intergenerational assistance and self-support on the life satisfaction of beneficiaries and non-beneficiaries of the pension scheme was analyzed using an ordered logit regression model with 2015 national representative data from China’s Health and Retirement Longitudinal Survey. Our sample consists of a cross-sectional data set of 3815 retired urban elderly aged 60 and above. The empirical results depict that though enjoying benefits from the public pension scheme generally enhances life satisfaction, beneficiaries of the Government and Institution Pension and Enterprise Employee Basic Pension are more advantaged than beneficiaries under the Urban-Rural Social Pension Scheme. The pension inequalities existing at provincial levels and across social groups such as gender and residence registration status also affect life satisfaction adversely. Women and rural ‘Hukou’ registered retired urban residents are at an apparent disadvantage. Getting financial and emotional support from children broadly improves life satisfaction. Non-beneficiaries of the public pension benefit more from the financial support of children than public pension beneficiaries. There is also a positive effect of cohabiting with children on life satisfaction when retired urban residents are single as compared to being married. Financial and physical self-support ability in forms of good health, home ownership and wealth management enhance life satisfaction significantly. However, largely, retired urban elderly have a higher life satisfaction when they are financially independent of children and are supported by state pension schemes. Our findings indicate that self-support ability of the elderly together with pension benefits are more effective in enhancing the life satisfaction of retired urban elderly in China. It is recommended that government institute policies to promote personal finance initiatives by the elderly while improving the pension scheme and reducing pension inequality.

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“…Comparatively little work has examined the well‐being effects of retirement but the findings on what exists are quite diverse, with some studies identifying a positive retirement impact (e.g., Charles ; Johnston and Lee ; Latif ), and other studies finding little impact (e.g., Blanchflower and Oswald ; Horner ; Kapteyn, Lee, and Zamarro ). In relation to satisfaction with different areas of an individual's life, there is but one prior study (Bonsang and Klein ) that is closely related to our analysis.…”

Section: Introductionmentioning

confidence: 99%

Retirement, Personality, and Well‐being

2015

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This study investigates how two sources of individual heterogeneity-personality and gender-impact the well-being effects of retirement. Using data on older men and women from the British Household Panel Survey and its continuation, Understanding Society, we estimate the causal effect of retirement on satisfaction with overall life and domains of life in the presence of personality characteristics. As retirement is often considered to be a choice and thus may be endogenous to individual-level characteristics, we use the eligibility ages for basic state pension in the United Kingdom as instruments for retirement. We find that retirement increases leisure satisfaction of both males and females but not necessarily life satisfaction and income satisfaction. We further show that certain personality characteristics affect the well-being of female retirees. For males, however, personality does not seem to matter in how they cope with retirement. (JEL I31, J26, A12, C23)

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Does Retirement Induced Through Social Security Pension Eligibility Influence Subjective Well-Being? A Cross-Country Comparison

Cited by 10 publications

References 30 publications

Does It Matter How You Retire? Old-Age Retirement Routes and Subjective Economic Well-Being

Does It Matter How You Retire? Old-Age Retirement Routes and Subjective Economic Well-Being

Old Age Support in Urban China: The Role of Pension Schemes, Self-Support Ability and Intergenerational Assistance

Retirement, Personality, and Well‐being

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