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Mental Retirement

Author

Listed:
  • Susann Rohwedder
  • Robert Willis

Abstract

Some studies suggest that people can maintain their cognitive abilities through “mental exercise”. This has not been unequivocally proven. Retirement is associated with a large change in a person’s daily routine and environment. In this paper, the authors propose two mechanisms how retirement may lead to cognitive decline. For many people retirement leads to a less stimulating daily environment. In addition, the prospect of retirement reduces the incentive to engage in mentally stimulating activities on the job. They investigate the effect of retirement on cognition empirically using cross-nationally comparable surveys of older persons in the United States, England, and 11 European countries in 2004. They find that early retirement has a significant negative impact on the cognitive ability of people in their early 60s that is both quantitatively important and causal. Identification is achieved using national pension policies as instruments for endogenous retirement.

Suggested Citation

  • Susann Rohwedder & Robert Willis, 2009. "Mental Retirement," Working Papers 711, RAND Corporation.
  • Handle: RePEc:ran:wpaper:711
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    References listed on IDEAS

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    1. Smits W, 2002. "Occupation Specific or Generic Skills? Conflicting Interests of Firms and Apprentices," ROA Research Memorandum 001, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    2. Bonsang, Eric & Adam, Stéphane & Perelman, Sergio, 2012. "Does retirement affect cognitive functioning?," Journal of Health Economics, Elsevier, pages 490-501.
    3. 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).
    4. Coe, Norma B. & Zamarro, Gema, 2011. "Retirement effects on health in Europe," Journal of Health Economics, Elsevier, pages 77-86.
    5. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, pages 352-352.
    6. Heckman, James J, 1995. "Lessons from the Bell Curve," Journal of Political Economy, University of Chicago Press, pages 1091-1120.
    7. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    cognition; retirement; human capital; international comparison; HRS; SHARE; ELSA;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • 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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