Does Retirement Make People Happy? The Impact of Retirement on Couples' Life Satisfaction in Germany

William Fernandez

No mk4tx_v1, SocArXiv from Center for Open Science

Abstract: In the developed world, efforts are underway to extend working lives. However, discussions often overlook the potential implications of retirement for individual well-being. While the relationship between retirement and life satisfaction has been extensively studied, the effects of spousal retirement remain underexplored, particularly from a gender and timing perspective. This paper examines the impact of retirement on self-reported life satisfaction among couples in Germany. Using data from the German Socio-Economic Panel (SOEP), I employ standard fixed-effects (FE) models and fixed-effects individual slopes (FEIS) to estimate the causal effects of personal and partner retirement on life satisfaction. The findings show that retirement substantially increases life satisfaction, a result that remains robust across methodologies and specifications. For partner retireïment, accounting for heterogeneous trends by health status reveals an overall positive effect, driven by men. Moreover, women appear to be worse off when their husbands retire while they remain in the workforce, whereas the opposite holds for men. To my knowledge, this is the first study to examine the impact of both personal and spousal retirement on life satisfaction using the SOEP. The results provide robust evidence that partner retirement affects life satisfaction, highlighting the importance of understanding retirement as a life course event with intra-household spillover effects that extend beyond the retiring individual.

Date: 2025-10-15
New Economics Papers: this item is included in nep-age, nep-eur, nep-hap and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:mk4tx_v1

DOI: 10.31219/osf.io/mk4tx_v1

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