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Retirement and cognitive abilities: Evidence from the German early retirement age reform for women

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  • Bergschneider, Henrik
  • Kottmann, Robin
  • Schmitz, Hendrik
  • Westphal, Matthias

Abstract

We study the effects of retirement on cognitive functioning among women aged 63 to 67 by exploiting a German retirement reform that raised the early retirement age for women born after 1951 by three years, from 60 to 63. Our indicators of cognitive functioning are objective cognitive test scores (word recall, semantic fluency, and the Stroop test) from a large biomedical dataset, as well as the diagnosis of cognitive disorders from administrative health insurance claims. We find reductions of around 13% of a standard deviation per year in retirement for measures of fluid intelligence, whereas crystallized intelligence remains unaffected. These estimates reflect the reform-induced shift in retirement duration for compliers around the eligibility cutoff. In contrast, additional years in retirement do not affect diagnosis of cognitive disorder and decrease diagnoses of dementia-related risk factors such as hypertension, depression, and sleep problems. The improvement in health outcomes suggests that cognitive decline is not driven by health deterioration but might possibly be due to reduced cognitive engagement after leaving work.

Suggested Citation

  • Bergschneider, Henrik & Kottmann, Robin & Schmitz, Hendrik & Westphal, Matthias, 2026. "Retirement and cognitive abilities: Evidence from the German early retirement age reform for women," Journal of Health Economics, Elsevier, vol. 108(C).
    • Handle: RePEc:eee:jhecon:v:108:y:2026:i:c:s0167629626000597
    DOI: 10.1016/j.jhealeco.2026.103161
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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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