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Retirement and Cognitive Development: Are the Retired Really Inactive?

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Author Info

  • Andries de Grip

    (ROA, Maastricht University, IZA and Netspar)

  • Arnaud Dupuy

    (Reims Management School, ROA, IZA and Netspar. Corresponding address: Maastricht University PO Box 616, NL-6200, MD, The Netherlands. Email: a.dupuy@maastrichtuniversity.nl.)

  • Jelle Jolles

    (Faculty of Psychology and Education, Free University of Amsterdam)

  • Martin van Boxtel

    (Department of Neuropsychology, Maastricht University)

Abstract

This paper uses longitudinal test data to analyze the relation be- tween retirement and cognitive development. Controlling for individ- ual xed e¤ects and lagged cognition, we nd that retirees face greater declines in information processing speed than those who remain em- ployed. However, remarkably, their cognitive ‡exibility declines less, an e¤ect that appears to be persistent 6 years after retirement. Both e¤ects of retirement on cognitive development are comparable to the e¤ect of a ve to six-year age di¤erence. We show that the e¤ects of retirement on cognitive decline cannot be explained by (1) a re- lief e¤ect after being employed in low-skilled jobs, (2) mood swings or (3) changes in lifestyle. Controlling for changes in blood pressure, which are negatively related to cognitive ‡exibility, we still nd lower declines in cognitive ‡exibility for retirees. Since the decline in in- formation processing speed after retirement holds particularly for the low educated, activating these persons after retirement could lower the social costs of an aging society.

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File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-14.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by Maastricht School of Management in its series Working Papers with number 2012/14.

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Length: 38 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:msm:wpaper:2012/14

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Keywords: Cognitive decline; labor market activity; retirement;

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References

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  1. Norma B. Coe & Gema Zamarro, 2008. "Retirement Effects on Health in Europe," Working Papers 588, RAND Corporation Publications Department.
  2. Andries de Grip & Hans Bosma & Dick Willems & Martin van Boxtel, 2008. "Job-worker mismatch and cognitive decline," Oxford Economic Papers, Oxford University Press, vol. 60(2), pages 237-253, April.
  3. Vivian H. Hamilton & Philip Merrigan & Éric Dufresne, 1997. "Down and out: estimating the relationship between mental health and unemployment," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 397-406.
  4. Giovanni S.F. Bruno, 2004. "Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models," KITeS Working Papers 159, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2004.
  5. Dhaval Dave & R. Inas Rashad & Jasmina Spasojevic, 2008. "The Effects of Retirement on Physical and Mental Health Outcomes," Southern Economic Journal, Southern Economic Association, vol. 75(2), pages 497-523, October.
  6. Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
  7. Calvo, Esteban & Haverstick, Kelly & Sass, Steven, 2007. "What Makes Retirees Happier: A Gradual or 'Cold Turkey' Retirement?," MPRA Paper 5607, University Library of Munich, Germany.
  8. Costa, Dora L., 1998. "The Evolution of Retirement," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226116082, March.
  9. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
  10. Costa, Dora L, 1998. "The Evolution of Retirement: Summary of a Research Project," American Economic Review, American Economic Association, vol. 88(2), pages 232-36, May.
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Cited by:
  1. Sahlgren, Gabriel H., 2012. "Work ‘til You Drop: Short- and Longer-Term Health Effects of Retirement in Europe," Working Paper Series 928, Research Institute of Industrial Economics.

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