Scandinavian Working Papers in Economics

Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2002:19: An econometric analysis of the mental-health effects of major events in the life of older individuals

Maarten Lindeboom (), France Portrait and Gerard van den Berg ()
Additional contact information
Maarten Lindeboom: IFAU - Insitute for Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
France Portrait: IFAU - Insitute for Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden
Gerard van den Berg: IFAU - Insitute for Labour Market Policy Evaluation, Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden

Abstract: Major events in the life of an older individual, such as retirement, a significant decrease in income, death of the spouse, disability, and a move to a nursing home, may affect the mental health status of the individual. For example, the individual may enter a prolonged depression. We investigate this using unique longitudinal panel data that track labor market behavior, health status, and major life events, over time. To deal with endogenous aspects of these events we apply fixed effects estimation methods. We find some strinkingly large effects of certain events on the occurence of depression. We relate the results to the health care and labor market policy towards older individuals.

Keywords: Death; retirement; income loss; disease; depression; health indicators; widowhood; care; panel data; endogeneity; fixed effects

JEL-codes: I18

27 pages, February 4, 2002

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