When people retire, they often begin activities such as volunteering. But is this simply because you have more free time, or is there something deeper going on? Based on new research, Alina Velias, Sotiris Georganas and John Laliotis Find evidence that retirement makes people more kind.
How will you feel when you retire? After adapting to the changes, will you find yourself doing less of the things you did during your working years, such as becoming better citizens, better stewards of public resources, or contributing to the greater good in ways big and small?
When people retire, they often begin activities such as volunteering. Is this simply because there is more time, or is something deeper going on? Are retirees more inclined to do good for society as they transition into a life stage that is significantly different from their working years?
Measuring prosocial behavior
To explore this, we analyzed a large data set covering 22 European countries, tracking individuals over time. Crucially, we exploited differences in official “early retirement ages” across countries to distinguish whether it is aging itself or retirement that influences prosocial behavior.
Think of Adrian and Bjorn. Both are 63 years old. Adrian lives in Sweden, where the early retirement age is 61, and has been retired for two years. He volunteers three hours a week. Bjorn, who lives in Norway, still works (the early retirement age in Norway is 67) and volunteers just one hour a week.
This natural change in retirement thresholds allowed us to compare behavior at the same age. Our analysis shows that once people cross their country’s retirement threshold, they tend to engage more in prosocial activities, such as volunteering, regardless of their age.
But does this mean retirees are getting friendlier, or are they simply looking for ways to fill their newfound free time? Bjorn wants to volunteer as much as Adrian, but he doesn’t have the time yet. To investigate further, we designed a study that went beyond identifying the link between retirement and volunteering.
To understand the drivers of this behavior, we used an approach called incentive compatibility experiments. Simply put, this means measuring the behavior of retirees and retirees in real time as they make decisions.
Participants can choose to donate not only their labor, but also their money (from the experiment) to a real charity (e.g., supporting cancer research, protecting the environment, or supporting refugees). Or, they may keep the money for themselves or give it to friends or family, just like we tend to use money in real life. This allowed us to pinpoint the mechanisms behind their choices.
retirement and kindness
Here’s what we found: Not only do retirees give more of their time, they also give more money, even if retirement reduces their financial resources. This means that retirement brings not just an abundance of leisure time, but a real increase in prosociality.
If retirement makes people kinder, what does this mean for governments raising the retirement age? Extending your working life may increase your tax revenue, but it may result in a loss of pro-social contributions such as volunteering, donations, and acts of kindness that benefit society as a whole.
Our study is one of the few studies that combines survey data and experimental evidence to directly measure prosociality in retirees. As the population ages, these findings become increasingly relevant. Prosocial behavior is often difficult to track, but it contributes greatly to society. Policymakers should carefully consider the implications for wider wellbeing when reforming the retirement age. Balancing the real economic value of taxes with the hard-to-measure but far-reaching social impact of kindness is essential to informed decision-making.
For more details, please refer to the author’s attached paper. Journal of Economic Behavior and Organization.
Note: This article gives the views of the author and not the position of EUROPP (European Politics and Policy) or the London School of Economics. Main image source: half point /Shutterstock.com
