Working longer, feeling worse? How job quality shapes the mental health toll of delayed retirement

Alexandra Lugova (), Michele Belloni (), Bérangère Legendre () and Jeremy Tanguy
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Alexandra Lugova: IREGE, University Savoie Mont Blanc
Michele Belloni: Departiment of Economics and Statistics “Cognetti de Martiis”, University of Turin, http://www.est.unito.it/
Bérangère Legendre: IREGE, University Savoie Mont Blanc

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: This paper examines the impact of delayed retirement, induced by pension reforms, on late-career mental health, focusing on working conditions. While studies have analyzed aspects of job quality — such as high-strain roles and automation risk — none have considered the full range of job characteristics shaping workers’ experiences. We address this gap by analyzing six key dimensions of job quality: skills and discretion, working time quality, physical environment, social environment, work intensity, and career prospects. To mitigate endogeneity concerns associated with self- reported mental health measures, we incorporate occupation-level data on working conditions from external sources. Our analysis leverages pension reforms enacted between 2011 and 2015 in 14 European countries, integrating data from the Survey of Health, Ageing and Retirement in Europe with job quality measures from the European Working Conditions Survey. Using a staggered difference-in-differences design, we estimate the causal impact of extended work horizons on depression while accounting for cross-country differences in labor markets and pension systems. Our findings confirm that, on average, delaying retirement negatively affects older workers' mental health. However, the magnitude of this impact varies significantly depending on job quality. Workers in unsupportive social environments, precarious jobs with limited career prospects, or roles with low autonomy and high intensity exhibit the highest increases in depression. In contrast, those in supportive workplaces, stable jobs, and high-autonomy roles experience milder negative effects or even mental health benefits. To ensure pension reforms do not adversely affect workers’ well-being, they should be complemented by labor market policies that promote sustainable working conditions, job adaptability, and lifelong learning.

Pages: pages 45
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