The Impact of Voluntary and Involuntary Retirement on Mental Health: Evidence from Older Irish Adults

Irene Mosca and Alan Barrett

No 8723, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The few studies that have attempted to identify the causal effects of retirement on mental health and well-being have provided conflicting evidence. Hence, whether retirement affects mental health positively or negatively is still unclear. Our primary objective is to investigate the impact of retirement on mental health as measured by the 20-item Center for Epidemiological Studies Depression Scale (CES-D). We use data from the first two waves of The Irish Longitudinal Study on Ageing (TILDA). This is a nationally representative sample of individuals aged 50 and over and living in Ireland. To deal with possible endogeneity problems, we use first-differenced estimation models and control for a broad range of life events occurring between the two waves. These include transition to retirement but also demographic, social, economic and physical health events. As part of the TILDA survey, reasons for retirement are asked. We exploit this information and distinguish between individuals who retired voluntarily, involuntarily or because of own ill health. We find that involuntary, or forced, retirement has a negative and statistically significant effect on mental health. In contrast, we find no effects for voluntary retirement. We also find that retirement due to ill health is negatively associated with mental health.

Keywords: retirement; mental health (search for similar items in EconPapers)
JEL-codes: J14 J26 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014-12
New Economics Papers: this item is included in nep-age, nep-hea and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: Journal of Mental Health Policy and Economics, 2016, 19, 33-44

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