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Retirement and Cognitive Development: Are the Retired Really Inactive?

  • Andries de Grip

    (ROA, Maastricht University, IZA and Netspar)

  • Arnaud Dupuy

    (Reims Management School, ROA, IZA and Netspar. Corresponding address: Maastricht University PO Box 616, NL-6200, MD, The Netherlands. Email: a.dupuy@maastrichtuniversity.nl.)

  • Jelle Jolles

    (Faculty of Psychology and Education, Free University of Amsterdam)

  • Martin van Boxtel

    (Department of Neuropsychology, Maastricht University)

This paper uses longitudinal test data to analyze the relation be- tween retirement and cognitive development. Controlling for individ- ual xed e¤ects and lagged cognition, we nd that retirees face greater declines in information processing speed than those who remain em- ployed. However, remarkably, their cognitive ‡exibility declines less, an e¤ect that appears to be persistent 6 years after retirement. Both e¤ects of retirement on cognitive development are comparable to the e¤ect of a ve to six-year age di¤erence. We show that the e¤ects of retirement on cognitive decline cannot be explained by (1) a re- lief e¤ect after being employed in low-skilled jobs, (2) mood swings or (3) changes in lifestyle. Controlling for changes in blood pressure, which are negatively related to cognitive ‡exibility, we still nd lower declines in cognitive ‡exibility for retirees. Since the decline in in- formation processing speed after retirement holds particularly for the low educated, activating these persons after retirement could lower the social costs of an aging society.

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File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-14.pdf
File Function: First version, 2012
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Paper provided by Maastricht School of Management in its series Working Papers with number 2012/14.

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Length: 38 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:msm:wpaper:2012/14
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  1. Andries de Grip & Hans Bosma & Dick Willems & Martin van Boxtel, 2008. "Job-worker mismatch and cognitive decline," Oxford Economic Papers, Oxford University Press, vol. 60(2), pages 237-253, April.
  2. Costa, Dora L, 1998. "The Evolution of Retirement: Summary of a Research Project," American Economic Review, American Economic Association, vol. 88(2), pages 232-36, May.
  3. Coe, Norma B. & Zamarro, Gema, 2011. "Retirement effects on health in Europe," Journal of Health Economics, Elsevier, vol. 30(1), pages 77-86, January.
  4. Norma B. Coe & Hans‐Martin von Gaudecker & Maarten Lindeboom & Jürgen Maurer, 2012. "The Effect Of Retirement On Cognitive Functioning," Health Economics, John Wiley & Sons, Ltd., vol. 21(8), pages 913-927, 08.
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  6. Bonsang Eric & Adam Stéphane & Perelman Sergio, 2010. "Does Retirement Affect Cognitive Functioning?," Research Memorandum 005, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  7. Vivian H. Hamilton & Philip Merrigan & Éric Dufresne, 1997. "Down and out: estimating the relationship between mental health and unemployment," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 397-406.
  8. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
  9. Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
  10. Dhaval Dave & R. Inas Rashad & Jasmina Spasojevic, 2008. "The Effects of Retirement on Physical and Mental Health Outcomes," Southern Economic Journal, Southern Economic Association, vol. 75(2), pages 497-523, October.
  11. Dora L. Costa, 1998. "The Evolution of Retirement," NBER Chapters, in: The Evolution of Retirement: An American Economic History, 1880-1990, pages 6-31 National Bureau of Economic Research, Inc.
  12. Esteban Calvo & Kelly Haverstick & Steven A. Sass, 2007. "What Makes Retirees Happier: A Gradual or 'Cold Turkey' Retirement?," Working Papers, Center for Retirement Research at Boston College wp2007-18, Center for Retirement Research, revised Oct 2007.
  13. Bruno, Giovanni S.F., 2005. "Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models," Economics Letters, Elsevier, vol. 87(3), pages 361-366, June.
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