With: Titus Galama and Maarten Lindeboom

Abstract: Recent literature reports a U-shape in mental health over the life-cycle, with mental health dipping during prime working ages. However, what is behind the U-shape remains a mystery. We find that across countries (U.S., UK and continental Europe) the U-shape is present for the unemployed and disabled, but not for the employed, who have stable mental health scores. For older adults, the mental health of the unemployed and disabled improves and eventually converges, on average, with that of the employed around the ages at which individuals retire. We hypothesize that the social norm (expectation) of work has a detrimental causal effect on the mental health of those not able to abide by it (e.g., the unemployed and disabled) and that this effect should disappear with retirement as it becomes more accepted for individuals not to work. Using SHARE data on individuals aged 50+ from 11 European countries, we regress the mental health (measured by the EURO-D scale) of the unemployed and disabled on the age-, country-, and wave-dependent retirement fraction (our proxy for the social norm of work) and find statistically and economically significant effects. The U-shape in mental health of the unemployed / disabled may be the result of changes in the social norm (expectation) of work.

Bio: Coen van de Kraats is a PhD student in Economics at the VU University Amsterdam and Tinbergen Institute. His research focuses on socioeconomic inequalities in the life cycle evolution of human capital, with a particular focus on mental health outcomes such as mood and anxiety disorders. Coen’s PhD advisors are Maarten Lindeboom (VU University Amsterdam) and Titus Galama (University of Southern California). More information here.