Abstract
Flexible work arrangements and retirement options provide one solution for the challenges of unemployment and underemployment, aging populations, and unsustainable public pension systems in welfare states around the world. We examine the relationships between well-being and job satisfaction on the one hand and employment status and retirement, on the other, using Gallup World Poll data for several European countries and the United States. We find that voluntary part-time workers are happier, experience less stress and anger, and have higher job satisfaction than other employees. Using statistical matching, we show that late-life workers under voluntary part-time or full-time arrangements have higher well-being than retirees. There is no well-being premium for involuntary late-life work and self-employment compared to retirement, however. Our findings inform ongoing debates about the optimal retirement age and the fiscal burdens of public pension systems. JEL codes: J14; J21; J26; J28; I31; Z18
Highlights
Unemployment and underemployment, aging populations, and unsustainable retirement policies, among others, pose serious challenges for welfare states around the world (Derviş 2013)
Propensity score matching results We explored the well-being effect of retiring compared to late-life work by calculating the Average Treatment Effect on the Treated (ATT) using propensity score matching (PSM)
While our findings suggest that the retired fare worse than their voluntarily full-time and part-time counterparts along a number of well-being dimensions, there is no well-being premium for involuntary work and self-employment compared to retirement
Summary
Unemployment and underemployment, aging populations, and unsustainable retirement policies, among others, pose serious challenges for welfare states around the world (Derviş 2013). The global financial crisis and its uneven recovery have heightened these issues, with the new labor force entrants taking the hardest hit. The young are disproportionately affected even in countries with relatively lower unemployment rates such as the U.S (Burtless 2013), and the long-term effects of delayed labor force entrance could be especially harmful. On the other end of the age distribution, unsustainable fiscal deficits in many countries are forcing the reconsideration of public pensions and retirement schemes. Given higher life expectancies and low fertility rates in the developed world, the share of older workers will continue to grow
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