Associations between employment and mental health of older workers with disparate conditions: Evidence from China

•Younger older people who participated in employment experienced better mental health.•The association between employment and mental health presents significant heterogeneity.•Gender, age, residence, marital status, educational attainments, and self-rated health all contribute to the heterogeneous association, but pension benefits are the dominant factor.•There was a non-linearity in the conditional average treatment effects across the distribution of pensions. This study aimed to examine associations between the employment of older people and mental health across demographic characteristics, socioeconomic conditions, and health status, with a focus on pensions. This study included 4,512 participants aged 60–69 from the CLASS in 2014. A multiple linear regression was conducted to investigate the association between employment and mental health. A causal forest model was applied to estimate the heterogeneous treatment effects. Employed individuals (n = 1,295) reported better mental health than their non-employed counterparts. This association displayed significant heterogeneity, primarily attributed to pensions. Those with lower pensions may be compelled to work due to financial reasons, thus offsetting the health-promotion effect of employment. Employment may benefit the mental health of older adults, which has a more significant marginal effect on those who are men, older, urban residents, without a spouse, below primary education, receiving more pensions, and less family and friend support.