Luxembourg Institute of Socio-Economic Research (LISER)
Maison des Sciences Humaines
11, Porte des Sciences
L-4366 Esch-sur-Alzette / Belval
LISER Salle de Conference, 1st Floor
seminars@liser.lu
Abstract
This paper explores the causal effect of parental retirement on adult children's well-being, an area primarily overlooked in current literature. It capitalizes on the UK eligibility age for the State Pension and the provisions of the UK 2011 Pension Act, which increased retirement ages to a great extent. Fuzzy Regression Discontinuity Design and a Differences-in-Difference design show that maternal retirement increases adult children's life and income satisfaction by 0.22 and 0.19 standard deviations in the short run. Paternal retirement negatively impacts adult children's life and income satisfaction by 0.11 and 0.08 standard deviations. The well-being response is strongest and most significant for adult children in low-income bands, with young children, and who live close to their parents.