Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/49480
Authors: 
Hetschko, Clemens
Knabe, Andreas
Schöb, Ronnie
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Labour Markets 3540
Abstract: 
Using data from the German Socio-Economic Panel from 1984-2009, we follow persons from their working life into their retirement years and find that, on average, employed people maintain their life satisfaction upon retirement, while long-term unemployed people report a substantial increase in their life satisfaction when they retire. These results are robust to controlling for changes in other life circumstances and suggest that retiring is associated with a switch in the relevant social norms that causes an increase in identity utility for the formerly unemployed. This is supportive of the idea that, by including identity in the utility function, results from the empirical life satisfaction literature can be reconciled with the economic theory of individual utility.
Subjects: 
life satisfaction
retirement
unemployment
identity
social norm
JEL: 
I31
J26
Document Type: 
Working Paper

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