Is there a consensus on the health consequences of retirement? A literature review

Abstract

We investigate the causal effect of retirement on health through literature. We explore the potential mechanisms which explain three effects: the switch from employment to retirement, later retirement, and earlier retirement. The empirical strategies used to identify the causal effects are mainly based on the observation of changes in health status at the legal age for retirement entitlement or on reforms that have led to changes in retirement incentives. Literature renders possible to make several observations on the average effect estimation. Retirement leads to better self-reported health, less depression, a decrease in healthcare consumption, a decline in cognition and an ambiguous effect on physical health. Later retirement has no effect on mortality, decreases healthcare consumption, and has a negative or non-significant impact on self-reported health. Studies on the impact of earlier retirement are scarce due to few natural experiments exploiting such a variation. Lastly, some studies find evidence of heterogeneous effects by gender and occupational status. As there are relatively few studies on this aspect, the question should be seriously explored in future research.

The effects of an increase in the retirement age on health — Evidence from administrative data

“…A number of studies find positive effects of retirement on mental health (e.g., Atalay and 3 For a more detailed overview of the literature please refer to e.g. Garrouste and Perdrix (2021) Barrett, 2014; Atalay et al, 2019;Belloni et al, 2016;Charles, 2004;Eibich, 2015;Gorry et al, 2018;Grip et al, 2011;Leimer, 2017). Atalay and Barrett (2014), for example, exploit variation of a pension reform for women in Australia and find positive effects of retirement on mental health.…”

How Retirement Affects Mental Health, Cognitive Skills and Mortality; An Overview of Recent Empirical Evidence

“…In their quantitative analysis they find no evidence of a publication bias. Garrouste & Perdrix (2022) present a descriptive analysis of previous studies of which many find no effect of retirement on mental health, cognitive skills or mortality. They conclude that it is not always clear whether a non-significant effect is due to a lack of statistical power or an absence of effect.…”

Cohort profile: Singapore’s nationally representative Retirement and Health Study with 5 waves over 10 years

“…However, the cost and benefits of retirement on health and wellbeing has seen conflicting results [ 1 , 3 - 5 ]. Some reviews find that retirement decreases stress, improve health perceptions, and lower the severity of medical diseases [ 1 , 6 ]. Other studies however found that retirement increase social isolation [ 7 ], and even advocate the benefits of working beyond retirement [ 8 ].…”