Does Retirement Affect Cognitive Functioning?
46 Pages Posted: 24 Dec 2010
Date Written: November 1, 2010
This paper analyzes the effect of retirement on cognitive functioning using two large scale surveys. First, a longitudinal survey among older Americans allows controlling for individual heterogeneity and endogeneity of the retirement decision. Second, a cross-national European survey allows identifying the causal effect of retirement on cognition 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. It suggests that promoting labor force participation of older workers could delay cognitive decline, and thus the occurrence of associated impairments at older age.
Keywords: Aging, Cognition, Retirement, Social Security
JEL Classification: I12, J14, J24, J26
Suggested Citation: Suggested Citation