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Retirement and Cognitive Functioning: International Evidence

Author

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  • Raquel Fonseca
  • Arie Kapteyn
  • Gema Zamarro

Abstract

We survey the recent literature on the effects of retirement on cognitive functioning at older ages around the world. We describe results from studies using similar data, definitions and methods to capture causal effects. The studies yield widely varying results. Most papers find that being retired leads to a decline of cognition. However, the size and significance of the estimated effects vary dramatically depending on methods. We replicate several of these results using the same data sets. We discuss the factors that are likely causing the differences observed, and find that results are sensitive to the inclusion of “country effects”, suggesting a key role for unobserved differences across countries that affect both retirement ages and cognitive decline.

Suggested Citation

  • Raquel Fonseca & Arie Kapteyn & Gema Zamarro, 2016. "Retirement and Cognitive Functioning: International Evidence," Cahiers de recherche 1610, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
  • Handle: RePEc:lvl:criacr:1610
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    File URL: https://www.cedia.ca/sites/cedia.ca/files/cahier_16-10_cognitive_functioning.pdf
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    References listed on IDEAS

    as
    1. Coe, Norma B. & Zamarro, Gema, 2011. "Retirement effects on health in Europe," Journal of Health Economics, Elsevier, vol. 30(1), pages 77-86, January.
    2. Xiaoyan Lei & Yuqing Hu & John J. McArdle & James P. Smith & Yaohui Zhao, 2012. "Gender Differences in Cognition among Older Adults in China," Journal of Human Resources, University of Wisconsin Press, vol. 47(4), pages 951-971.
    3. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    4. James Banks & Fabrizio Mazzonna, 2012. "The Effect of Education on Old Age Cognitive Abilities: Evidence from a Regression Discontinuity Design," Economic Journal, Royal Economic Society, vol. 122(560), pages 418-448, May.
    5. James Banks & Cormac O'Dea & Zoë Oldfield, 2010. "Cognitive Function, Numeracy and Retirement Saving Trajectories," Economic Journal, Royal Economic Society, vol. 120(548), pages 381-410, November.
    6. Martina Celidoni & Chiara Dal Bianco & Guglielmo Weber, 2013. "Early retirement and cognitive decline. A longitudinal analysis using SHARE data," "Marco Fanno" Working Papers 0174, Dipartimento di Scienze Economiche "Marco Fanno".
    7. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
    8. Anne Case & Christina Paxson, 2009. "Early Life Health and Cognitive Function in Old Age," American Economic Review, American Economic Association, vol. 99(2), pages 104-109, May.
    9. John Bound & Timothy Waidmann, 2007. "Estimating the Health Effects of Retirements," Working Papers wp168, University of Michigan, Michigan Retirement Research Center.
    10. Bingley, Paul & Martinello, Alessandro, 2013. "Mental retirement and schooling," European Economic Review, Elsevier, vol. 63(C), pages 292-298.
    11. Kevin Neuman, 2008. "Quit Your Job and Get Healthier? The Effect of Retirement on Health," Journal of Labor Research, Springer, vol. 29(2), pages 177-201, June.
    12. Laura Bianchini & Margherita Borella, 2014. "Cognitive Functioning and Retirement in Europe," CeRP Working Papers 139, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    cognition; retirement; aging; country fixed effects;

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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