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Retirement and Cognitive Development: Are the Retired Really Inactive?

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  • DE GRIP Andries
  • DUPUY Arnaud
  • JOLLES Jelle
  • VAN BOXTEL Martin

Abstract

This paper uses longitudinal test data to analyze the relation between retirement and cognitive development. Controlling for individual fixed effects and lagged cognition, we find that retirees face greater declines in information processing speed than those who remain employed. However, remarkably, their cognitive flexibility declines less, an effect that appears to be persistent 6 years after retirement. Both effects of retirement on cognitive development are comparable to the effect of a five to six-year age difference. Controlling for changes in blood pressure, which are negatively related to cognitive flexibility, we still find lower declines in cognitive flexibility for retirees. Since the decline in information processing speed after retirement holds particularly for the low educated, activating these persons after retirement could lower the social costs of an aging society.

Suggested Citation

  • DE GRIP Andries & DUPUY Arnaud & JOLLES Jelle & VAN BOXTEL Martin, 2013. "Retirement and Cognitive Development: Are the Retired Really Inactive?," LISER Working Paper Series 2013-11, Luxembourg Institute of Socio-Economic Research (LISER).
    • Handle: RePEc:irs:cepswp:2013-11
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    Cited by:

    1. Plamen Nikolov & Md Shahadath Hossain, 2020. "Do Pension Benefits Accelerate Cognitive Decline in Late Adulthood? Evidence from Rural China," Papers 2007.05884, arXiv.org, revised Dec 2022.
    2. Sahlgren, Gabriel H., 2012. "Work ‘til You Drop: Short- and Longer-Term Health Effects of Retirement in Europe," Working Paper Series 928, Research Institute of Industrial Economics.

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    More about this item

    Keywords

    Cognitive decline; Labor market activity; Retirement;
    All these keywords.

    JEL classification:

    • 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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