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Retirement, social support and mental well-being: a couple-level analysis

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Abstract

Social support is increasingly acknowledged as an important resource for promoting well-being. We test whether social support changes around retirement. We also examine whether social support moderates dynamics in mental well-being around retirement and consider both own and spouse’s retirement drawing on a unique longitudinal, couple-level data set from Australia. We observe descriptively no effect of own or spouse’s retirement on social support. However, those with high social support do experience a small but statistically significant improvement in mental well-being post retirement. Using pension eligibility as an instrument, we find that own retirement causally improves mental well-being for women and by a similar degree for those with low/high social support. We also estimate responses to life satisfaction and find evidence that spill-over benefits from spousal retirement are larger for individuals with low social support.

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Notes

  1. We include the small number of older same-sex couples (< 0.002% of observations in our analysis sample).

  2. Retirement status is not specifically asked about in 2003, 2004, 2007 and 2011.

  3. Since mental wellbeing and social support are likely to be correlated, we examined the extent to which these variables capture independent resources. In our estimation sample, the pooled correlation is moderate (0.44). However, the within correlation is relatively low (0.19), indicating substantial independent time-varying variation.

  4. Our IV approach requires that we include non-retirees to estimate the first stage. However, we do not know whether non-retirees will retire in the future, which introduces non-random measurement error in the anticipation indicators (our lag retirement terms suffer from the same issue for retirees we do not observe entering retirement). Further, we would require as many instruments as event-time indicators; in preliminary work we found that lags and leads of the eligibility indicator were sometimes weak instruments for the event-time indicators. This would have made the coefficients difficult to interpret within an event study framework.

  5. For people who retire more than once, we use their first observed retirement as the event date.

  6. We remain agnostic about the employment state before retirement, which means that differences by subgroup (i.e. sex, social support level) may reflect heterogeneity by transition state. However, this does not seem to be the case. In Appendix Table 9 we report the proportions of people in each employment state in the year before retirement. Across all our subgroups, most people (at least 51%) transition from a state of employment. Moreover, our event study figures are similar if we restrict the sample to those transitioning from employment Figures 6, 7, 8, 9.

  7. For completeness, we also repeated our event study analysis using life satisfaction as the dependent variable and report figures in Appendix B Figures 10, 11. The results show life satisfaction improving over the transition for own retirement, particularly for high support men and low support women. Responses to spouse’s retirement are positive in the short-term, particularly for high support types. The magnitudes of these effects are much smaller than the IV estimates.

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Funding

This research was partially supported by the Australian Research Council Centre of Excellence for Children and Families over the Life Course (project number CE140100027) and by an Australian Research Council Discovery Early Career Researcher Award (project number DE210100582). The Centre is administered by the Institute for Social Science Research at The University of Queensland, with nodes at The University of Western Australia, The University of Melbourne, and The University of Sydney. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the author and should not be attributed to either DSS or the Melbourne Institute. Equal authorship; authorship order listed alphabetically. Corresponding author: Nathan Kettlewell.

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Authors and Affiliations

  1. Economic Discipline Group, University of Technology Sydney, Sydney, Australia

    Nathan Kettlewell

  2. ARC Centre of Excellence for Children and Families Over the Life Course, Brisbane, Australia

    Nathan Kettlewell & Jack Lam

  3. Institute of Labor Economics (IZA), Bonn, Germany

    Nathan Kettlewell

  4. Institute for Social Science Research, University of Queensland, Brisbane, Australia

    Jack Lam

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  1. Nathan Kettlewell
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Correspondence to Nathan Kettlewell.

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Appendices

Appendix

Appendix A—Main result Tables

See Tables 4, 5, 6, 7, 8

Table 4 Fixed effects estimates—time since retirement on social support for coupled retirees
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Table 5 Fixed effects estimates—time since retirement on mental well-being for coupled retirees
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Table 6 Fixed effects estimates—time since spouse’s retirement on social support for coupled retirees
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Table 7 Fixed effects estimates—time since spouse’s retirement on mental well-being for coupled retirees
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Table 8 Observations per event date dummy for each main results table
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Table 9 Proportion of people in each employment state in year before retirement for estimation subsamples
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Appendix B—Additional events study results

See Figs. 6,7, 8, 9, 10, 11,12

Fig. 6
figure 6

Fixed effects estimates—time since retirement on social support for coupled retirees (only people employed in year before retirement)

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Fig. 7
figure 7

Fixed effects estimates—time since retirement on mental well-being for coupled retirees (only people employed in year before retirement)

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Fig. 8
figure 8

Fixed effects estimates—time since spouse’s retirement on social support for coupled retirees (only people employed in year before retirement)

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Fig. 9
figure 9

Fixed effects estimates—time since spouse’s retirement on mental well-being for coupled retirees (only people employed in year before retirement)

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Fig. 10
figure 10

Fixed effects estimates—time since retirement on life satisfaction for coupled retirees

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Fig. 11
figure 11

Fixed effects estimates—time since spouse’s retirement on life satisfaction for coupled retirees

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Fig. 12
figure 12

Proportion of people retired by age to pension eligibility. Y-axis is the proportion of people in the estimation sample who are retired. Bins are month-level and fit lines are estimated using local quadratic regression

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Appendix C—Additional IV Estimates

See Tables 10 and 11.

Table 10 Additional IV estimates for women
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Table 11 Additional IV estimates for men
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Kettlewell, N., Lam, J. Retirement, social support and mental well-being: a couple-level analysis. Eur J Health Econ 23, 511–535 (2022). https://doi.org/10.1007/s10198-021-01374-1

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