PurposeThis study aimed to examine associations between the employment of older people and mental health across demographic characteristics, socioeconomic conditions, and health status, with a focus on pensions. MethodsThis study included 4,512 participants aged 60–69 from the CLASS in 2014. A multiple linear regression was conducted to investigate the association between employment and mental health. A causal forest model was applied to estimate the heterogeneous treatment effects. ResultsEmployed individuals (n = 1,295) reported better mental health than their non-employed counterparts. This association displayed significant heterogeneity, primarily attributed to pensions. Those with lower pensions may be compelled to work due to financial reasons, thus offsetting the health-promotion effect of employment. ConclusionEmployment may benefit the mental health of older adults, which has a more significant marginal effect on those who are men, older, urban residents, without a spouse, below primary education, receiving more pensions, and less family and friend support.