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Does Retirement Affect Cognitive Functioning?

Author Info

Listed author(s):
  • Bonsang Eric
  • Adam Stéphane
  • Perelman Sergio

    (METEOR)

Abstract

This paper analyzes the effect of retirement on cognitive functioning using two large scale surveys. On the one hand the HRS, a longitudinal survey among individuals aged 50+ living in the United States, allows us to control for individual heterogeneity and endogeneity of the retirement decision by using the eligibility age for Social Security as an instrument. On the other hand, a comparable international European survey, SHARE, allows us to identify the causal effect of retirement on cognitive functioning by using the cross-country differences in the age-pattern of retirement. The results highlight in both cases a significant negative, and quantitatively comparable, effect of retirement on cognitive functioning. Our results suggest that promoting labor force participation of older workers is not only desirable to insure the viability of retirement schemes, but it could also delay cognitive decline, and thus the occurrence of associated impairments at older age.

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File URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:848429de-7327-449a-ad34-082629658771/datastreams/ASSET1/content
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Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 005.

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Date of creation: 2010
Handle: RePEc:unm:umamet:2010005
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Keywords: labour economics ;

Other versions of this item:

Find related papers by JEL classification:
  • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
  • J1 - Labor and Demographic Economics - - Demographic Economics
  • 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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  1. B. Douglas Bernheim, 1989. "The Timing of Retirement: A Comparison of Expectations and Realizations," NBER Chapters,in: The Economics of Aging, pages 335-358 National Bureau of Economic Research, Inc.
  2. Coe, Norma B. & Zamarro, Gema, 2011. "Retirement effects on health in Europe," Journal of Health Economics, Elsevier, vol. 30(1), pages 77-86, January.
  3. Christopher J. Ruhm, 1995. "Secular Changes in the Work and Retirement Patterns of Older Men," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 362-385.
  4. Courtney Coile & Jonathan Gruber, 2001. "Social Security Incentives for Retirement," NBER Chapters,in: Themes in the Economics of Aging, pages 311-354 National Bureau of Economic Research, Inc.
  5. Peracchi, Franco & Welch, Finis, 1994. "Trends in Labor Force Transitions of Older Men and Women," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 210-242, April.
  6. Susann Rohwedder & Robert J. Willis, 2010. "Mental Retirement," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 119-138, Winter.
  7. David Haardt, 2007. "Cognitive functioning and labour force participation among older men and women in England," Social and Economic Dimensions of an Aging Population Research Papers 222, McMaster University.
  8. John Bound & Timothy Waidmann, 2007. "Estimating the Health Effects of Retirements," Working Papers wp168, University of Michigan, Michigan Retirement Research Center.
  9. 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.
  10. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, 09.
  11. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
  12. Richard Disney & Tanner, Tanner, 1999. "What can we learn from retirement expectations data?," IFS Working Papers W99/17, Institute for Fiscal Studies.
  13. Kerwin Kofi Charles, 2002. "Is Retirement Depressing?: Labor Force Inactivity and Psychological Well-Being in Later Life," NBER Working Papers 9033, National Bureau of Economic Research, Inc.
  14. Hugo Benítez-Silva & Debra S. Dwyer, 2005. "The Rationality of Retirement Expectations and the Role of New Information," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 587-592, August.
  15. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
  16. 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.
  17. Rachel S. Newson & Eva B. Kemps, 2005. "General Lifestyle Activities as a Predictor of Current Cognition and Cognitive Change in Older Adults: A Cross-Sectional and Longitudinal Examination," Journals of Gerontology: Series B, Gerontological Society of America, vol. 60(3), pages 113-120.
  18. Margery H. Silver & Evguenia Jilinskaia & Thomas T. Perls, 2001. "Cognitive Functional Status of Age-Confirmed Centenarians in a Population-Based Study," Journals of Gerontology: Series B, Gerontological Society of America, vol. 56(3), pages 134-140.
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  1. Arbete stimulerar hjärnan
    by Niclas Berggren in Nonicoclolasos on 2010-03-19 05:40:29
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