Does the road to happiness depend on the retirement decision? Evidence from Italy

This study estimates the causal effect of retirement decision on well-being in Italy. To do so, the authors exploit the exogenous variation provided by the changes in the eligibility criteria for pensions that were enacted in Italy in 1995 (Dini’s law) and in 1997 (Prodi’s law, from the names of the prime ministers at the time of their introduction). A sizeable and positive impact of retirement decision is found on satisfaction with leisure time and on frequency of meeting friends. Furthermore, the results are generalized, allowing for the estimation of different moments from different data sources.