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Pension Policies, Retirement and Human Capital Depreciation in Late Adulthood

Author

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  • Nikolov, Plamen

    (Harvard Institute for Quantitative Social Science)

  • Adelman, Alan

    (State University of New York)

Abstract

Economists have mainly focused on human capital accumulation and considerably less on the causes and consequences of human capital depreciation in late adulthood. Studying human capital depreciation over the life cycle has powerful economic consequences for decision-making in old age. Using data from China, we examine how a new retirement program affects cognitive performance. We find large negative effects of pension benefits on cognitive functioning among the elderly. We detect the most substantial impact of the program on delayed recall, a significant predictor of the onset of dementia. We show suggestive evidence that the program leads to larger negative impacts among women. We demonstrate that retirement and access to a retirement pension plan plays a significant role in explaining cognitive decline at older ages.

Suggested Citation

  • Nikolov, Plamen & Adelman, Alan, 2020. "Pension Policies, Retirement and Human Capital Depreciation in Late Adulthood," IZA Discussion Papers 13932, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13932
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    References listed on IDEAS

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    More about this item

    Keywords

    cognitive functioning; cognition; aging; health; mental retirement; middle-income countries; life cycle; LMICs; developing countries; China;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • 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
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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