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The effect of retirement on elderly cognitive functioning

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  • Atalay, Kadir
  • Barrett, Garry F.
  • Staneva, Anita

Abstract

Cognitive functioning exhibits a clear lifecycle pattern with a general deterioration over older ages. This article estimates the short-term effect of retirement on cognitive performance of elderly Australians by exploiting the exogenous variation in retirement decisions induced by changes in social security eligibility rules. The empirical results show that on average retirement has a negative but modest effect on cognition, and the rate of cognitive decline with age is greater for men than women. The results for women display no significant effects on working memory and speed of information processing. The article further adds to the literature by providing evidence on the possible mechanisms through which retirement could affect individual's cognitive performance. We find that moving into retirement leads women to increase the time spent in mental and household activities, which may in part explain the modest effect we observe for women.

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  • Atalay, Kadir & Barrett, Garry F. & Staneva, Anita, 2019. "The effect of retirement on elderly cognitive functioning," Journal of Health Economics, Elsevier, vol. 66(C), pages 37-53.
    • Handle: RePEc:eee:jhecon:v:66:y:2019:i:c:p:37-53
    DOI: 10.1016/j.jhealeco.2019.04.006
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    5. Salm, Martin & Siflinger, Bettina & Xie, Mingjia, 2021. "The Effect of Retirement on Mental Health: Indirect Treatment Effects and Causal Mediation," Other publications TiSEM e28efa7f-8219-437c-a26d-2, Tilburg University, School of Economics and Management.
    6. Jan C. van Ours, 2022. "How Retirement Affects Mental Health, Cognitive Skills and Mortality; An Overview of Recent Empirical Evidence," De Economist, Springer, vol. 170(3), pages 375-400, August.
    7. Leimer, Birgit & van Ewijk, Reyn, 2022. "No “honeymoon phase”: whose health benefits from retirement and when," Economics & Human Biology, Elsevier, vol. 47(C).
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    9. Green, Colin P. & Mao, Likun & O'Sullivan, Vincent, 2021. "Internet usage and the cognitive function of retirees," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 747-767.
    10. Nathan Kettlewell & Jack Lam, 2022. "Retirement, social support and mental well-being: a couple-level analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(3), pages 511-535, April.
    11. Johannes Geyer & Mara Barschkett & Peter Haan & Anna Hammerschmid, 2023. "The effects of an increase in the retirement age on health care costs: evidence from administrative data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(7), pages 1101-1120, September.
    12. Barschkett, Mara & Geyer, Johannes & Haan, Peter & Hammerschmid, Anna, 2022. "The effects of an increase in the retirement age on health — Evidence from administrative data," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    13. Zhu, Rong, 2021. "Retirement and voluntary work provision: Evidence from the Australian Age Pension reform," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 674-690.
    14. Clémentine Garrouste & Elsa Perdrix, 2022. "Is there a consensus on the health consequences of retirement? A literature review," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 841-879, September.
    15. Freise, Diana & Schmitz, Hendrik & Westphal, Matthias, 2022. "Late-career unemployment and cognitive abilities," Journal of Health Economics, Elsevier, vol. 86(C).
    16. Woong Lee & Ran Im, 2023. "An Empirical Assessment of the Interactionist Model: The Relationship Between Household Income and Depression Among Retirees in Korea," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(2), pages 729-751, April.
    17. Chen, Xi, 2022. "The impact of spousal and own retirement on health: Evidence from urban China," World Development, Elsevier, vol. 159(C).
    18. Orestis Delardas & Panagiotis Giannos, 2023. "Cognitive Performance Deficits Are Associated with Clinically Significant Depression Symptoms in Older US Adults," IJERPH, MDPI, vol. 20(7), pages 1-10, March.
    19. Cornelissen, Thomas & Dang, Thang, 2022. "The multigenerational impacts of educational expansion: Evidence from Vietnam," Labour Economics, Elsevier, vol. 78(C).
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    21. Yingying Zhang & Steve Bradley & Robert Crouchley, 2023. "Gender Differences in the Effect of Retirement Duration on Cognitive Functioning," Working Papers 379420912, Lancaster University Management School, Economics Department.
    22. Zhu, Rong & Onur, Ilke, 2023. "Does retirement (really) increase informal caregiving? Quasi-experimental evidence from Australia," Journal of Health Economics, Elsevier, vol. 87(C).

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