The effect of mandatory retirement on mental health in Japan

Masaaki Mizuochi, Nanzan University

This paper analyzes the effect of mandatory retirement on elderly’s mental health in Japan. As broadly known, Japan’s population is rapidly aging. The rapid aging makes a serious problem on public pension system. To deal with this problem, Japanese government decided to extend the pensionable age 60 to 65. In most Japanese companies, however, its compulsory retirement age is 60. Retirees have to live five years without pension. Japanese government, therefore, is trying to extend compulsory retirement age 60 to 65. This change possibly affects the mental health of elderlies. In this paper, we use Japanese panel data, National Family Research of Japan, 2008-2012 Panel Study (NFRJ-Panel08). We estimate the effect of mandatory retirement on CES-D. Our estimation suggests that mandatory retirement deteriorates elderly’s mental health.