Gabriel Heller Sahlgren is research fellow at the Institute of Economic Affairs, and affiliated researcher at the Research Institute of Industrial Economics in Stockholm, Sweden.
All blogs are the views of the author, and do not necessarily reflect the views of Independent Age.
In the last 50 years, retirement has gone from a fringe to a mass phenomenon in most Western countries, including the UK. Many people long for the day when they can finally put the stress of a working life behind them. At the same time, government policy continues to try to make people work longer. But doesn’t that mean risking their health?
According to my research, the answer is no. Despite the fact that work-related stress might decrease following retirement, other factors may work in the opposite direction. For example, retirement is a significant change in one’s life, which in itself can be very stressful. Also, many people appear to lose their social networks as they leave their jobs, thus increasing the likelihood of loneliness. Combined with the usual drop in income, it is clear that retirement may not be so good for your health after all.
I decided to investigate this empirically and what I found was quite remarkable. Whereas there are no negative or positive immediate health effects of retirement, the longer-term impact is strongly negative. For example, it decreases the likelihood that individuals report to be in ‘very good’ or ‘excellent’ health by about 40%. Similar effects were found in terms of mental and physical health indicators. Naturally, not everyone will get ill after retirement, as it depends on one’s habits. For example, voluntary work may very well stem some of the negative effects. But the fact that I do find such strong negative effects on average suggests that many people would be better off having a job than being full-time retired.
Now, if it is good to continue at least some form of paid work in old age, how can we ensure that people are motivated to do so? The answer is ‘incentives’. In a paper published in January 2014, I perused the research analysing the effects of public policy on retirement, finding that financial incentives within public pension systems, employment protection, and disability insurance schemes are key culprits for inducing people to retire. Any solution must focus on radically reforming these.
So there you have it. While we shouldn’t work until we die, my work suggests that we would be well advised to shape a healthier work-retirement balance in old age – both for the sake of shaping a better future for the country and yourself.
What do you think needs to happen to make the UK the best country to grow older in?
What concerns you most about growing older and why?
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