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

22 Pages Posted: 30 Dec 2014

See all articles by Irene Mosca

Irene Mosca

National University of Ireland, Maynooth (NUI Maynooth)

Alan Barrett

Economic and Social Research Institute; IZA Institute of Labor Economics

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: mental health, retirement

JEL Classification: J26, J14

Suggested Citation

Mosca, Irene and Barrett, Alan M., The Impact of Voluntary and Involuntary Retirement on Mental Health: Evidence from Older Irish Adults. IZA Discussion Paper No. 8723, Available at SSRN: https://ssrn.com/abstract=2543918 or http://dx.doi.org/10.2139/ssrn.2543918

Irene Mosca (Contact Author)

National University of Ireland, Maynooth (NUI Maynooth) ( email )

Maynooth, County Kildare W23 F2H6
Ireland

Alan M. Barrett

Economic and Social Research Institute ( email )

4 Burlington Road
Dublin 4
Republic of Ireland
+35 31 667 1525 (Phone)
+35 31 668 6231 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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