Category Archives: Wellbeing/Satisfaction

Stung by Pension Reforms: The Impact of a Change in State Pension Age on Women and their Partners

In many developed countries, pension systems are being reformed by increasing the age eligibility to receive the state pension and by reducing its generosity.  The aim of these reforms has been to improve the financial sustainability of the system by encouraging people to work at older ages.

Up to now, the pension reforms in the UK have mostly affected women born in the 1950s, who have seen their pensionable age increase from 60 in 2010 to 65 in 2018 and 66 in 2020.  As the state pension age continues to increase, many more men and women will be affected in the future.

We compare women in the UK who are similar in terms of marital status, education, and many other factors, but who were born only a few months apart and therefore, due to the reform, have different state pension ages.  Our results suggest an overall negative impact of the reform, which mostly affects more vulnerable women.

Those women who are slightly younger and need to wait longer to reach their state pension age are more likely to be in employment and work longer hours than those who are slightly older and have already reached their state pension age.  Hence, the increase in the state pension age had the desired effect of keeping more women in employment.  However, we also find clear negative effects on mental health and on other aspects of wellbeing.

Crucially, the reform had a more negative impact on some groups of women than others.  For both women with and without a university degree the reform has led to a similar increase in the chances of being active in the labour market (either employed, self-employed or seeking work).  However, while those with a degree are more likely to be in employment, for those without a degree there is also an increase in unemployment.  It is women without a degree who experience a negative effect on mental health, are more likely to say they struggle financially, that they have problems paying bills, and have lower level of satisfaction with their income.  In contrast, among women with a university degree the effect is overall close to zero or possibly even positive.  This may be because women with a university degree are more likely to hold highly paying – and possibly more satisfying – jobs.

The reform also had a more negative effect on women without a partner.  We find a similar increase in employment among women with and without a partner, and that both experience a worsening in mental health and satisfaction with life, but these negative effects are much larger among women without a partner.  While all affected women are much more likely to say they struggle financially, have problems paying bills and have lower level of satisfaction with their income as a result of the change in the state pension age, the negative effect is much larger among women without a partner.  As women who are living with a partner can rely on additional income and support from their partner, the change in the state pension age has increased inequalities in wellbeing.

Our new results on the direct and indirect effects of the pension reforms in the UK are likely to be applicable also to other countries that are seeking to implement similar pension age reforms.  It is important that the positive fiscal impact of the increase in the state pension age is measured against the negative effects on wellbeing and the increase in inequality between those who can and those who cannot afford to retire at their preferred age.  Additional inequalities created based on level of education and on family structure should also be considered.

Della Giusta, M., Longhi S. (2021) Stung by Pension Reforms: The Unequal Impact of Changes in State Pension Age on UK Women and their Partners, Labour Economics72:102049.

Unhappiness in Unemployment: Is it the Same for Everyone?

Many studies have shown that there is a general tendency for men’s subjective wellbeing to be more badly affected by unemployment when compared to women, although the extent varies across countries. The existing literature notes the gender differences and offers possible explanations, but does not formally compare competing hypotheses. We analyse whether gender differences in life satisfaction associated with the experience of unemployment can be attributed to degrees of specialisation in the labour market, differences in the types of work undertaken by men and women, differences in personality traits, work identity or gender norms. We find that it is not all, but some, women who suffer less than men when experiencing a transition into unemployment. The experience of unemployment for women is differentiated by pay, work identity and, most powerfully, gender attitudes.

Longhi S., Nandi A., Bryan M., Connolly S. Gedikli C. (2018) Unhappiness in Unemployment: Is it the Same for Everyone?  Sheffield Economic Research Paper Series no. 2018007.
Also appeared as a Research Report on Gender and Unemployment for the What Works Wellbeing Centre.

Cultural Diversity and Subjective Wellbeing

This paper analyses the impact that diversity has on life satisfaction of people living in England. In England, and in many other countries, local communities are becoming more diverse in terms of country of birth, ethnicity and religion of residents, with unclear consequences on the well-being of people living in these communities. The results suggest that white British people living in diverse areas have on average lower levels of life satisfaction than those living in areas where diversity is low, while there is no correlation on average between diversity and life satisfaction for non-white British people and foreign born.

Longhi S. (2014) Cultural Diversity and Subjective Wellbeing, IZA Journal of Migration, 2014, 3:13.

Occupational Change in Britain and Germany

We use British and German panel data to analyse job changes involving a change in occupation. We assess: (1) the extent of occupational change, taking into account the possibility of measurement error in occupational codes; (2) whether job changes within the occupation differ from occupation changes in terms of the characteristics of those making such switches; and (3) the effects of the two kinds of moves in respect of wages and job satisfaction. We find that occupation changes differ from other job changes, generally reflecting a less satisfactory employment situation, but also that the move in both cases is positive in respect of change in wages and job satisfaction.

Longhi S., Brynin M. (2010) Occupational Change in Britain and Germany, Labour Economics, 17 (4): 655-666.