AUTHOR & ABSTRACT
Maarten Lindeboom is Professor and Head of the Economics Department at VU Amsterdam. He is an editor of the Journal of Health Economics and holds various positions in boards of international research institutes. His research interests are Health, Labor Economics and Demography (Early life conditions human capital formation and later life health outcomes; Health, Income and Work across the life cycle; Mental Health and Economic Decision Making). He has published extensively in top academic journals (AER, JEEA, EJ, REStat etc).
Why life gets better after age 50, for some: mental health and the social norm of work
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 (e.g., the unemployed and disabled) and that this effect disappears gradually as it becomes more accepted for individuals not to work as they approach retirement ages. Using SHARE data on individuals aged 50+ from 10 European countries, we identify the social norm of work effect in a differences-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, our proxy for the social norm of work. The initial mental well-being gap differs between countries, ranging from 0.74 to 1.30 EURO-D points, and full convergence occurs generally at an age that is slightly above the normal retirement age (around age 68), when everyone has retired. This, and additional evidence we provide, suggests that improvements in mental well being at older ages are the result of changes in the social norm of work. Improvements are larger than the benefit of tertiary education, having a household income of 200,000 Euros, and the detriment of being widowed, suggesting that there is substantial ``untapped well-being potential'' among the unemployed / disabled in mid-life. Our results have implications for understanding the U-shaped pattern of subjective well-being with age.