Journal of Happiness Studies

, Volume 15, Issue 1, pp 125–144

Subjective Well-Being and Retirement: Analysis and Policy Recommendations

Research Paper


This study examines the relationship between retirement and subjective well-being (SWB), utilizing international data from sixteen countries in Western Europe and the US. Differences in social security regimes are exploited to estimate the retirement decision such that it is exogenous to individual-level characteristics. Although results from traditional ordinary least squares suggest an ambiguous relationship between retirement and SWB, this is due to comparatively lower SWB among those who choose retirement. The removal of selection bias reveals a large, positive effect that fades over a few years, suggesting a multi-stage adjustment to retirement. Individuals facing formal retirement at age 65 or later experience an increase in SWB that is roughly equivalent in total value to that of individuals facing earlier retirement, and both groups return to trend by age 70. This suggests that raising the formal retirement age, which is widely discussed today by policymakers, is relatively neutral with regard to SWB in the long-term.


Retirement Life satisfaction Aging International Social security 

Copyright information

© Springer Science+Business Media Dordrecht 2012

Authors and Affiliations

  1. 1.Goldman School of Public PolicyUniversity of California, BerkeleyBerkeleyUSA
  2. 2.General Medical DisciplinesStanford University School of MedicineStanfordUSA

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