Does Working Longer Make People Healthier and Happier?

Abstract

Financing retirement is one of the major challenges facing an aging U.S. population. If individuals continue to retire in their early 60s, many will be hard pressed to maintain an adequate standard of living throughout retirement due to the declining role of Social Security, the shift to 401(k) plans, and low personal saving rates. Combine the retirement income crunch with the dramatic increase in life expectancy, and continued employment in later life appears to be an attractive option. While it is clear that working longer would benefit older Americans financially, less attention has focused on the non-monetary effects of work at older ages. This brief addresses the impact of late-life paid work on physical and psychological well-being. The first section reviews the literature on work at older ages and elderly well-being. The second section describes the analysis. The third and fourth sections present the results. The fifth section identifies vulnerable groups. A final section offers concluding thoughts...