A new working paper by Raquel Fonseca, Hugo Morin and Ana I. Moro-Egido is now available online.
Entitled “Stress and Retirement,” it investigates the bi-directional causal relationship between stress and retirement. Using data from the PSID (2007-2015), the authors show that a rise in stress increases the probability to retire by roughly 15.4 percentage points, while retirement decreases stress by 34.5 percentage points. Results remain similar when disaggregating by individuals’ characteristics, but the former effect is stronger for males, for people working in typical blue-collar jobs, and for people whose wealth is below the mean, while the latter is stronger for males, for white-collar workers, for people whose wealth is above the mean, and for white individuals.
Other results show that official retirement ages are a strong instrument for actual retirement age, that lagged physical activity levels are a non-linear instrument for perceived stress, and that objective measures of mental health are a strong instrument for perceived stress.
To read the working paper, click here.