Does (Re-)Entering the Labor Market at Advanced Ages Protect Against Cognitive Decline? A Panel-Matching Difference-in-Differences Approach

32 Pages Posted: 9 Apr 2022

See all articles by Jung Hyun Kim

Jung Hyun Kim

Universite du Luxembourg - Institute for Research on Socio-Economic Inequality

Graciela Muniz-Terrera

University of Edinburgh - Edinburgh Dementia Prevention

Anja Leist

University of Luxembourg

Abstract

While prolonged labor market participation becomes increasingly important in ageing societies, evidence of the impacts of entering or exiting work beyond age 65 on cognitive functioning is scarce. We estimate these effects using panel-matching difference-in-differences with populationrepresentative panel datasets from South Korea and the United States. We compare countries and across socioeconomic characteristics. We find general positive effects of entering the labor market in South Korea, while only individuals with high assets in the US benefit from entering the labor market. Exiting the labor market does not result in changes in cognitive functioning in Korea but is followed by a cognitive decline in individuals with low assets in the US. Findings suggest that the benefits and disincentives from late-life labor status transitions on cognitive functioning vary between South Korea and the US and across socioeconomic groups.

Keywords: older-age labor market, cognitive function, Difference-in-Differences, South Korea

Suggested Citation

Kim, Jung Hyun and Muniz-Terrera, Graciela and Leist, Anja, Does (Re-)Entering the Labor Market at Advanced Ages Protect Against Cognitive Decline? A Panel-Matching Difference-in-Differences Approach. Available at SSRN: https://ssrn.com/abstract=4079394 or http://dx.doi.org/10.2139/ssrn.4079394

Jung Hyun Kim (Contact Author)

Universite du Luxembourg - Institute for Research on Socio-Economic Inequality ( email )

Esch-sur-Alzette
Luxembourg

Graciela Muniz-Terrera

University of Edinburgh - Edinburgh Dementia Prevention ( email )

Edinburgh, EH4 2XU
United Kingdom

Anja Leist

University of Luxembourg ( email )

Kirchberg, 6, rue Richard Coudenhove-Kalergi
Luxembourg
Luxembourg

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