Do Pension Benefits Accelerate Cognitive Decline? Evidence from Rural China

Plamen Nikolov () and Md Shahadath Hossain ()
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Plamen Nikolov: State University of New York
Md Shahadath Hossain: State University of New York at Binghamton

No 2023-008, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: Economists have mainly focused on human capital accumulation, rather than on the causes and consequences of human capital depreciation in late adulthood. To investigate how human capital depreciates over the life cycle, we examine how a newly introduced pension program, the National Rural Pension Scheme, affects cognitive performance in rural China. We find significant adverse effects of access to pension benefits on cognitive functioning among the elderly. We detect the most substantial impact of the program on delayed recall, a cognition measure linked to the onset of dementia. In terms of mechanisms, we find that cognitive deterioration in late adulthood is mediated by a substantial reduction in social engagement, volunteering, and activities fostering mental acuity.

Keywords: life cycle; human capital; cognitive functioning; cognition; middle-income countries; LMICs; developing countries (search for similar items in EconPapers)
JEL-codes: H55 J24 O15 (search for similar items in EconPapers)
Date: 2023-02
New Economics Papers: this item is included in nep-age, nep-cna and nep-neu
Note: ECI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Nikolo ... ccel-cog-decline.pdf First version, September, 2022 (application/pdf)

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