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Retirement and Cognitive Decline: Evidence from Global Aging Data

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  • Motegi, Hiroyuki
  • Nishimura, Yoshinori
  • Oikawa, Masato

Abstract

This study analyzes the effect of retirement on cognitive function. According to the human capital theory, we can hypothesize that workers invest in their cognitive ability more than retirees because cognitive investment increases a worker’s wage. As a result, it is possible that the cognitive ability decreases after retirement, a hypothesis analyzed in this study. In health economics, this hypothesis has been examined especially after 2000. First, we show that an analysis method used in some related studies is not valid for estimating this effect. Furthermore, we analyze this effect by using our method. Our estimates indicate that the workers’ mathematical scores decrease after retirement in a wide range of analyzed countries and heterogeneous groups. However, retirement has a weak effect on cognitive ability. Additionally, we investigate the heterogeneity of this effect. For example, we find that the elderly with higher body mass indexs and fat intake experience a negative effect of retirement on cognitive function.

Suggested Citation

  • Motegi, Hiroyuki & Nishimura, Yoshinori & Oikawa, Masato, 2017. "Retirement and Cognitive Decline: Evidence from Global Aging Data," MPRA Paper 76431, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:76431
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    Cited by:

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    More about this item

    Keywords

    mental retirement; cognitive function; social security; pension eligibility age; cross- country instruments; global aging data;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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