The Effect of Physical and Cognitive Decline at Older Ages on Work and Retirement: Evidence From Occupational Job Demands and Job Mismatch

84 Pages Posted: 8 Feb 2018

See all articles by Peter Hudomiet

Peter Hudomiet

RAND Corporation

Michael D. Hurd

RAND Corporation; State University of New York at Stony Brook - College of Arts and Science - Department of Economics; National Bureau of Economic Research (NBER)

Susann Rohwedder

RAND Corporation

Robert J. Willis

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 2017

Abstract

As workers age, their physical and cognitive abilities tend to decline. This could lead to a mismatch between workers’ resources and the demands of their jobs, restricting future work. We use longitudinal data from the Health and Retirement Study (HRS) linked to detailed occupational characteristics from the O*NET project to investigate how mismatches between job demands and workers’ resources in two physical and two cognitive domains affect retirement outcomes. We estimate how changes in physical and cognitive resources as well as their interactions with occupational job-demands affect changes in 1) subjective reports of work-limiting health problems; 2) mental health; and 3) subjective probabilities of working past age 65. We also estimate hazard models for transitions from full-time work to retirement. We found that declines in physical and cognitive resources are strong predictors of all outcomes: Fewer resources lead to greater reporting of work-limiting health problems; decline in mental health; smaller subjective probabilities of working full-time past age 65; and more transitions from work to retirement. The interaction of resources with job demands, however, is only statistically significant for workers with large-muscle limitations who are more likely to report changes in outcomes when they work in occupations that rely heavily on physical strength. In contrast, the effects of declines in fine motor skills and cognition do not show statistically significant differences by occupational job demands. It appears cognitive and fine motor skills, at least as measured in the HRS, are universally important determinants of working, not specific to certain occupations.

Keywords: older workers, cognitive decline, occupational demands, physical decline, labor supply

Suggested Citation

Hudomiet, Peter and Hurd, Michael D. and Rohwedder, Susann and Willis, Robert J., The Effect of Physical and Cognitive Decline at Older Ages on Work and Retirement: Evidence From Occupational Job Demands and Job Mismatch (October 2017). Michigan Retirement Research Center Research Paper No. 2017-372. Available at SSRN: https://ssrn.com/abstract=3120678 or http://dx.doi.org/10.2139/ssrn.3120678

Peter Hudomiet (Contact Author)

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Michael D. Hurd

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States
310-393-0411 (Phone)
310-393-4818 (Fax)

State University of New York at Stony Brook - College of Arts and Science - Department of Economics ( email )

Stony Brook, NY 11794
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Susann Rohwedder

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

Robert J. Willis

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
38
Abstract Views
283
PlumX Metrics