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Why Life Gets Better after Age 50 For Some: Mental Well-Being and the Social Norm of Work

Coen van de Kraats (), Titus Galama () and Maarten Lindeboom ()
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Coen van de Kraats: Erasmus University, Tinbergen Institute
Maarten Lindeboom: Vrije Universiteit, Centre for Health Economics, Monash University, Tinbergen University, IZA

No 2022-040, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We provide evidence that the social norm (expectation) of work has a detrimental causal effect on the mental well-being of individuals not able to abide by it. Using SHARE data on men aged 50+ from 10 European countries, we identify the social norm of work effect in a difference-in-differences (DiD) model that compares mental well-being scores of unemployed/disabled individuals (the treatment group) with those of employed / retired individuals (the control group) at varying levels of the fraction of retirees of comparable age. The initial mental well-being gap at age 50 is large, with unemployed / disabled men experiencing lower levels of mental well-being. Beyond age 50, the mental well-being of unemployed and disabled men improves as peers of comparable age retire, and full convergence occurs generally at an age that is slightly above the normal retirement age, when everyone has retired. We estimate the social norm of work effect to be comparable to the benefit of tertiary education, the detriment of being widowed, and the benefit of having a household income of 2,000,000 Euros. We explore income-security and leisure-coordination channels as alternative interpretations of the effect to show that these cannot explain our findings.

Keywords: mental well-being; social norm of work; retirement institutions (search for similar items in EconPapers)
JEL-codes: D63 I10 I31 J60 (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-age
Note: HI
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