Retirement is bad for mental and physical health, says a new study published by the Institute of Economic Affairs and the Age Endeavour Fellowship, London.

The author, Gabriel H. Sahlgren, explained that initially retirement gives most people a small health boost, but over the medium- and long-term, it causes “a drastic decline in health”. He added that retirement’s detrimental effect on health applies to both males and females equally.

Gabriel H. Sahlgren wrote this paper whilst a Research Fellow at the Institute of Economic Affairs. He is currently Director of Research at the Centre for Market Reform of Education.

These findings are particularly significant today in the UK, says Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, because of the demographic changes in the country and the financial pressures this is placing on health care costs and state pensions.

The detrimental effect of retirement on mental health mentioned in this report contradicts some findings in previous studies. Researchers from Stockholm University, Sweden, reported in the BMJ (British Medical Journal) (November 2010 issue) that retirement reduces the risk of depression and fatigue, but not the risk of chronic diseases.

There are some barriers in place in the UK to retiring later. The author believes that there is compelling evidence that lawmakers should pursue policies to remove these barriers. Raising the age for state-pension entitlements is both possible and desirable and should lead to improved average senior health. Lawmakers should aim to remove impediments to later retirements, such as those that exist in the state pension system, disability provision and employment protection laws.

The report, titled “Work Longer, Live Healthier: The relationship between economic activity, health and government policy” (PDF. 52-page doc.), took into account possible confounding factors and shows that retirement..:

  • ..reduces a person’s likelihood of being in excellent or very good health by approximately 40% (self assessed)
  • ..raises the risk of developing clinical depression by about 40%
  • ..raises the risk of developing at least one diagnosed physical condition by approximately 60%
  • ..raises the risk of taking medication for that diagnosed condition by about 60%

How long a person is retired for also impacts on his/her health. Below are the results for spending twice as long in retirement (compared to the average period):

  • The likelihood of enjoying (self assessed) excellent or very good health is from 10% to 30% lower
  • The risk of developing clinical depression goes up by 17%
  • The risk of developing at least one diagnosed physical condition rises by 22%
  • The likelihood of taking medication for that diagnosed condition rises by 19%

Philip Booth said:

“Over several decades, governments have failed to deal with the ‘demographic time bomb’. There is now general agreement that state pension ages should be raised. The government should take firmer action here and also deregulate labour markets. Working longer will not only be an economic necessity, it also helps people to live healthier lives.”

Edward Datnow, Chairman of the Age Endeavour Fellowship, said of the report:

“In highlighting the positive link between work and health in old age this research is a wake-up call for the UK’s extensive and well-funded retirement lobbies. More emphasis needs to be given to ways of enabling a work-life balance beyond today’s normal retirement age with legislative discouragements to extending working life being replaced with incentives. There should be no ‘normal’ retirement age in future. More employers need to consider how they will capitalize on Britain’s untapped grey potential and those seeking to retire should think very hard about whether it is their best option.”

Below are some highlighted data from the report:

  • Over the last 50 years, labor market participation among elderly people has dropped considerably. There has been a slight reverse in this trend very recently.
  • In the European Union, approximately 70% of seniors aged 60-64 years are not working
  • In the UK:
    – in 1968, 90% of 55-59 year old males worked, compared to 70% at the end of the 1990s
    – In 1968, 80% of 60-64 year old males worked, compared to 50% at the end of the 1990s
    – In 1968, 30% of 65-69 year old males worked, compared to 15% at the end of the 1990s
  • The trend has reversed in most of the OECD countries in recent years. In 2008, approximately 80% of 55-59 year olds were working. Employment in 2008 for 60-64 year old stood at 60%, and 20% for the 65-69 age group
  • While people retire earlier today than in 1960, their current life expectancies are much longer. A 61-year-old male in 1960 had the same risk of dying within one year as a 70-year-old man in 2005 (in the UK)
  • While healthy life expectancy has improved over the last fifty years, it has done so at a slower pace than regular life expectancy. This suggests that people are able to work longer, but we should not expect working lifespan to increase at the same rate as total lifespan. From 1981 to 2006 male regular life expectancy increased by 4.2 years compared to 2.9 years for healthy life expectancy
  • The number of healthy years of life that we can enjoy today are greater than in the past. However, our working lives are shorter
  • The author wrote “If rising pension ages and labour force participation at older ages caused greater ill health then it would be a matter for concern. Most research on the relationship between health and working in old age has produced ambiguous results. Research in this area is inherently difficult….just as retirement can influence health, health can influence retirement decisions.”

Retirement ages for public employees in the USA and some European countries (OECD 2011)

  • Austria – 65
  • Belgium – 65
  • Denmark – 65
  • France – 65 (extending from 62 to 67 years over an 8-year period)
  • Germany – 67
  • Greece – 65
  • Italy – 60
  • Netherlands – 65 (67 for women)
  • Norway – 67
  • Spain – 65 (increasing over the coming years to 67)
  • Sweden – 65
  • Switzerland – 65 (64 for women)
  • United Kingdom – 68
  • United States – 67

Written by Christian Nordqvist