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Does retirement affect cognitive functioning?

Author

Listed:
  • Bonsang, Eric
  • Adam, Stéphane
  • Perelman, Sergio

Abstract

This paper analyses the effect of retirement on cognitive functioning using a longitudinal survey among older Americans, which allows controlling for individual heterogeneity and endogeneity of the retirement decision by using the eligibility age for social security as an instrument. The results highlight a significant negative effect of retirement on cognitive functioning. Our findings suggest that reforms aimed at promoting labour force participation at an older age may not only ensure the sustainability of social security systems but may also create positive health externalities for older individuals.

Suggested Citation

  • Bonsang, Eric & Adam, Stéphane & Perelman, Sergio, 2012. "Does retirement affect cognitive functioning?," Journal of Health Economics, Elsevier, vol. 31(3), pages 490-501.
  • Handle: RePEc:eee:jhecon:v:31:y:2012:i:3:p:490-501
    DOI: 10.1016/j.jhealeco.2012.03.005
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    References listed on IDEAS

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    1. B. Douglas Bernheim, 1989. "The Timing of Retirement: A Comparison of Expectations and Realizations," NBER Chapters,in: The Economics of Aging, pages 335-358 National Bureau of Economic Research, Inc.
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    5. Courtney Coile & Jonathan Gruber, 2001. "Social Security Incentives for Retirement," NBER Chapters,in: Themes in the Economics of Aging, pages 311-354 National Bureau of Economic Research, Inc.
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    8. David Haardt, 2007. "Cognitive functioning and labour force participation among older men and women in England," Social and Economic Dimensions of an Aging Population Research Papers 222, McMaster University.
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    More about this item

    Keywords

    Ageing; Cognition; Retirement; Social security; Instrumental variable estimation;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • 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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