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Use It Too Much and Lose It? The Effect of Working Hours on Cognitive Ability

Author

Listed:
  • Shinya Kajitani

    (Faculty of Economics, Meisei University; and Melbuorne Institute of Applied Economics and Social Research)

  • Colin McKenzie

    (Faculty of Economics, Keio University)

  • Kei Sakata

    (Faculty of Economics, Ritsumeikan University)

Abstract

Using data from Wave 12 of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we examine the impact of working hours on the cognitive ability of people living in Australia aged 40 years and older. Three measures of cognitive ability are employed: the Backward Digit Span; the Symbol Digits Modalities; and a 25-item version of the National Adult Reading Test. In order to capture the potential non-linear dependence of cognitive ability on working hours, the model for cognitive ability includes working hours and its square. We deal with the potential endogeneity of the decision of how many hours to work by using the instrumental variable estimation technique. Our findings show that there is a non-linearity in the effect of working hours on cognitive functioning. For working hours up to around 25 hours a week, an increase in working hours has a positive impact on cognitive functioning. However, when working hours exceed 25 hours per week, an increase in working hours has a negative impact on cognition. Interestingly, there is no statistical difference in the effects of working hours on cognitive functioning between men and women.

Suggested Citation

  • Shinya Kajitani & Colin McKenzie & Kei Sakata, 2016. "Use It Too Much and Lose It? The Effect of Working Hours on Cognitive Ability," Melbourne Institute Working Paper Series wp2016n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2016n07
    as

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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2016n07.pdf
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    References listed on IDEAS

    as
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    3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    4. Mark Wooden & Simon Freidin & Nicole Watson, 2002. "The Household, Income and Labour Dynamics in Australia (HILDA)Survey: Wave 1," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 339-348, September.
    5. Susann Rohwedder & Robert J. Willis, 2010. "Mental Retirement," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 119-138, Winter.
    6. Cottini, Elena & Lucifora, Claudio, 2010. "Mental Health and Working Conditions in European Countries," IZA Discussion Papers 4717, Institute of Labor Economics (IZA).
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    Cited by:

    1. Motegi, H. & Nishimura, Y. & Oikawa, M., 2016. "Retirement and Cognitive Decline: Evidence from Global Aging Data," Health, Econometrics and Data Group (HEDG) Working Papers 16/11, HEDG, c/o Department of Economics, University of York.

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    More about this item

    Keywords

    Cognitive ability; endogeneity; retirement; working hours;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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