Pathways to retirement: Are they related to patterns of short- and long-term subjective well-being?

Abstract

We examine the association between pathways to retirement and patterns of subjective well-being in Germany. We argue that short-term development of subjective well-being is related to social status changes while long-term development of subjective well-being is related to resources and changes in life circumstances. Importantly, we expect that how a person's social status changes and his/her access to resources post-retirement both depend on the person's specific pathway to retirement, resulting in distinct patterns of subjective well-being post-retirement. Based on data from the German Socio-Economic Panel, we categorized people as retiring from employment, short- or long-term unemployment, labour market inactivity or due to disability. We then used dual-change score models to compare trajectories of life satisfaction ten years before to ten years after the retirement transition. For people retiring from employment, life satisfaction did not change in the short term but developed more positively in the long term. In comparison, people retiring from unemployment or due to disability experienced a short-term increase in life satisfaction but had more negative long-term trajectories of life satisfaction. We found no retirement-related changes in life satisfaction for people retiring from inactivity. The findings suggest that different pathways to retirement are related to distinct patterns of subjective well-being and highlight the importance of late-life employment biographies for quality of life post-retirement.