“Personal network” and retirement: Is retirement bad for friendship and good for family relationships?

What shapes the size of a personal network of family and friends? We concentrates here on the effect of retirement from the work force. Retirement provides time to develop personal relationships; but it deprives from a potential supply of colleague friends. We draw evidence from a new question on the number of confidants in the 4th wave of the Survey of Health, Ageing and Retirement in Europe. The survey allows to take into account many potential determinants of personal relations. A first result is that being retired decreases friendship ties, while it increases family ties. Economic resources influence the number of confidants. We estimate that the negative effect of being retired on the number of friends is reduced by one half when we control for permanent income. The differences among countries and cohorts in retirement age regulation provide an instrument to get closer to a retirement effect. We find that the retirement decision can be endogenous. The result from the IV strategy is that the negative effect of retirement on the number of friends is erased for men, not for retired women who do have less friends than employed women, cet. par. . Finally the size of the personal network is found to have a positive but small impact on life satisfaction. Family ties are more important than friends for women and both types of ties seem equally important for men.