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Increases in wellbeing in the transition to retirement for the unemployed: catching up with formerly employed persons

Published online by Cambridge University Press:  20 September 2017

VALENTINA PONOMARENKO Open the ORCID record for VALENTINA PONOMARENKO [Opens in a new window] ,
ANJA K. LEIST  and
LOUIS CHAUVEL
VALENTINA PONOMARENKO*
Affiliation:
GESIS-Leibniz-Institute for the Social Sciences, Mannheim, Germany.
ANJA K. LEIST
Affiliation:
Institute for Research on Socio-Economic Inequality, University of Luxembourg, Luxembourg.
LOUIS CHAUVEL
Affiliation:
Institute for Research on Socio-Economic Inequality, University of Luxembourg, Luxembourg.
*
Address for correspondence: Valentina Ponomarenko, GESIS-Leibniz-Institute for the Social Sciences, B2, 4 Mannheim 68159, Germany E-mail: [email protected]
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Abstract

This paper examines the extent to which wellbeing levels change in the transition to retirement depending on transitioning from being employed, unemployed or economically inactive. Whereas transitioning from employment to unemployment has been found to cause a decrease in subjective wellbeing with more time spent in unemployment, it is not clear how transitioning from unemployment to retirement affects wellbeing levels. We use the Survey of Health, Ageing and Retirement in Europe to monitor the life satisfaction of respondents who retire in between two waves. We portray wellbeing scores before and after retirement and then identify the change in life satisfaction during the retirement transition using a First Difference model. Results indicate that being unemployed before retirement is associated with an increase in life satisfaction, but presents mainly a catching-up effect compared to employed persons transitioning to retirement. These results are still significant if we control for selection into unemployment and country differences. Retirement from labour market inactivity does not lead to significant changes in wellbeing. As the wellbeing of unemployed persons recovers after transitioning to retirement, especially the currently unemployed population should be supported to prevent detrimental consequences of economically unfavourable conditions and lower wellbeing.

Keywords

retirementunemploymenttransitionlabour market inactivitysubjective wellbeing
Type
Article
Information
Ageing & Society , Volume 39 , Issue 2 , February 2019 , pp. 254 - 276
Copyright
Copyright © Cambridge University Press 2017 

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