|Title||Late-career unemployment and cognitive abilities|
|Publication Type||Journal Article|
|Year of Publication||2022|
|Authors||Freise, D, Schmitz, H, Westphal, M|
|Journal||Journal of Health Economics|
|Keywords||Cognitive abilities, Event studies, Mental Health, Plant closures, Unemployment|
We study the effect of unemployment on cognitive abilities among individuals aged between 50 and 65 in Europe. To this end, we exploit plant closures and use flexible event-study estimations together with an experimentally elicited measure of fluid intelligence, namely word recall. We find that, within a time period of around eight years after the event of unemployment, cognitive abilities only deteriorate marginally – the effects are insignificant both in statistical and economic terms. We do, however, find significant effects of late-career unemployment on the likelihood to leave the labor force, and short-term effects on mental health problems such as depression and sleep problems.