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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. de Grip, Andries & Bosma, Hans & Willems, Dick & van Boxtel, Martin, 2007. "Job-Worker Mismatch and Cognitive Decline," IZA Discussion Papers 2956, Institute for the Study of Labor (IZA).
  2. 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.
  3. Norma B. Coe & Gema Zamarro, 2008. "Retirement Effects on Health in Europe," Working Papers 588, RAND Corporation Publications Department.
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  5. 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.
  6. Bruno, Giovanni S.F., 2005. "Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models," Economics Letters, Elsevier, vol. 87(3), pages 361-366, June.
  7. 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.
  8. 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.
  9. Dora L. Costa, 1998. "The Evolution of Retirement," NBER Chapters, in: The Evolution of Retirement: An American Economic History, 1880-1990, pages 6-31 National Bureau of Economic Research, Inc.
  10. Norma B. Coe & Hans‐Martin von Gaudecker & Maarten Lindeboom & Jürgen Maurer, 2012. "The Effect Of Retirement On Cognitive Functioning," Health Economics, John Wiley & Sons, Ltd., vol. 21(8), pages 913-927, 08.
  11. Bonsang Eric & Adam Stéphane & Perelman Sergio, 2010. "Does Retirement Affect Cognitive Functioning?," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  12. Dhaval Dave & Inas Rashad & Jasmina Spasojevic, 2006. "The Effects of Retirement on Physical and Mental Health Outcomes," NBER Working Papers 12123, National Bureau of Economic Research, Inc.
  13. Bonsang Eric & Adam Stéphane & Perelman Sergio, 2010. "Does Retirement Affect Cognitive Functioning?," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
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