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Use It Too Much and Lose It? The Effect of Working Hours on Cognitive Ability

26 Pages Posted: 29 Feb 2016 Last revised: 14 Mar 2017

Shinya Kajitani

Meisei University - School of Economics

Colin McKenzie

Keio University - Faculty of Economics

Kei Sakata

Ritsumeikan University

Date Written: February 24, 2016

Abstract

Using data from Wave 12 of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we examine the impact of working hours on the cognitive ability of people living in Australia aged 40 years and older. Three measures of cognitive ability are employed: the Backward Digit Span; the Symbol Digits Modalities; and a 25-item version of the National Adult Reading Test. In order to capture the potential non-linear dependence of cognitive ability on working hours, the model for cognitive ability includes working hours and its square. We deal with the potential endogeneity of the decision of how many hours to work by using the instrumental variable estimation technique. Our findings show that there is a non-linearity in the effect of working hours on cognitive functioning. For working hours up to around 25 hours a week, an increase in working hours has a positive impact on cognitive functioning. However, when working hours exceed 25 hours per week, an increase in working hours has a negative impact on cognition. Interestingly, there is no statistical difference in the effects of working hours on cognitive functioning between men and women.

Keywords: Cognitive ability, endogeneity, retirement, working hours

JEL Classification: I10, J22, J26

Suggested Citation

Kajitani, Shinya and McKenzie, Colin and Sakata, Kei, Use It Too Much and Lose It? The Effect of Working Hours on Cognitive Ability (February 24, 2016). Melbourne Institute Working Paper No. 7/16. Available at SSRN: https://ssrn.com/abstract=2737742

Shinya Kajitani (Contact Author)

Meisei University - School of Economics ( email )

2-1-1, Hodokubo
Hino
Tokyo, 191-8506
Japan

Colin McKenzie

Keio University - Faculty of Economics ( email )

2-15-45 Mita, Minato-ku
Tokyo 1088345
Japan

Kei Sakata

Ritsumeikan University ( email )

Japan

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