The effect of retirement on cognitive functioning.

TitleThe effect of retirement on cognitive functioning.
Publication TypeJournal Article
Year of Publication2012
AuthorsCoe, NB, von Gaudecker, H-M, Lindeboom, M, Maurer, J
JournalHealth Econ
Date Published2012 Aug
ISSN Number1099-1050
KeywordsAge Factors, Aged, Aging, Cognition, Decision making, Humans, Longitudinal Studies, Male, Mental Recall, Middle Aged, Occupations, Retirement, Socioeconomic factors, Time Factors

Cognitive impairment has emerged as a major driver of disability in old age, with profound effects on individual well-being and decision making at older ages. In the light of policies aimed at postponing retirement ages, an important question is whether continued labour supply helps to maintain high levels of cognition at older ages. We use data of older men from the US Health and Retirement Study to estimate the effect of continued labour market participation at older ages on later-life cognition. As retirement itself is likely to depend on cognitive functioning and may thus be endogenous, we use offers of early retirement windows as instruments for retirement in econometric models for later-life cognitive functioning. These offers of early retirement are legally required to be nondiscriminatory and thus, inter alia, unrelated to cognitive functioning. At the same time, these offers of early retirement options are significant predictors of retirement. Although the simple ordinary least squares estimates show a negative relationship between retirement duration and various measures of cognitive functioning, instrumental variable estimates suggest that these associations may not be causal effects. Specifically, we find no clear relationship between retirement duration and later-life cognition for white-collar workers and, if anything, a positive relationship for blue-collar workers.

User Guide Notes

Endnote Keywords

Cognitive Impairment/Decision Making/Well Being/labor Force Participation/early Retirement/DISABILITY/DISABILITY/retirement planning/early Retirement

Endnote ID


Alternate JournalHealth Econ
Citation Key7684
PubMed ID21818822