Life satisfaction across the retirement transition: a latent growth curve modeling approach

Abstract

This thesis investigates changes in life satisfaction across the retirement transition in Australian society. The focus of much previous research on retirement outcomes has focused on economic wellbeing. While economic resources are an important basis for quality of life, research has shown that subjective wellbeing is not solely dependent on economic wellbeing. This thesis examines variations in life satisfaction including the factors leading to these variations, and the existence of distinct social groups who report varying levels of life satisfaction following retirement. Retirement is a significant life course event and life stage, potentially involving major changes to an individual’s economic and social circumstances and requiring considerable personal adjustment. The analytical sample is based on the first nine waves of the Household, Income and Labour Dynamics in Australia (HILDA) project (2001 - 2009) and includes 600 people (302 men, 298 women) who made a single transition into retirement and who stay retired. Six main research questions were addressed:

1. How does life satisfaction change across the adult life course for men and women? 2. How does life satisfaction change in relation to retirement? 3. Are there gender differences in changes in life satisfaction in relation to retirement? 4. What factors predict life satisfaction in relation to retirement? 5. Are some social groups more likely to experience low levels of life satisfaction in relation to retirement than others? 6. What type of statistical model best captures the complexity of life satisfaction across the retirement transition?

Factors affecting life satisfaction for retirees and its change over time were examined using Latent Growth Curve Modeling and Latent Growth Mixture Modeling. Latent Growth Curve Models were used to investigate individual trajectories in life satisfaction across the retirement transition while the Latent Growth Mixture Modeling approach was used to identify latent sub-groups of people who experience retirement differently and to examine the variations in the characteristics and resources of those groups. By evaluating the advantages and disadvantages of each of the analytic approaches used in this thesis, an informed decision can be made about the optimal analytic strategy for analysing these and similar research questions.

The results indicate the presence of change in levels of life satisfaction when looking across pre- and post-retirement phases. A small drop in life satisfaction after the first three years of retirement was found. Low levels of life satisfaction pre-retirement are associated with higher levels of life satisfaction after retirement, for both men and women. A growth model with discontinuities in elevation and slope at retirement was found to best summarize the life satisfaction data, confirming the discontinuous nature of life satisfaction across the retirement transition. Three groups of respondents experiencing different trajectories of life satisfaction were identified by the models. The first group, by far the largest comprising 88% of respondents, was identified as the ‘maintainers’ and showed relatively high and stable levels of life satisfaction. A second group, comprising 7% of respondents, was identified as the ‘adapters’ and experienced a decline in life satisfaction in the three years leading up to retirement, followed by an increase after retirement. The final group, 5% of respondents, was identified as the ‘decliners’ and showed a steady decline in life satisfaction in the three years after retirement. The results show that while most people experience very little retirement related change in life satisfaction, there are latent sub-groups that experience significant change. These sub-groups were found to have lower levels of health and less access to a range of social and economic resources.