Do Pension Benefits Accelerate Cognitive Decline? Evidence from Rural China

Plamen Nikolov (pnikolov@post.harvard.edu) and Md Shahadath Hossain (mhossai3@binghamton.edu)
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Plamen Nikolov: Harvard Institute for Quantitative Social Science
Md Shahadath Hossain: University of Houston

No 15742, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: developing countries; life cycle; human capital; cognitive functioning; LMICs; cognition; middleincome countries (search for similar items in EconPapers)
JEL-codes: H55 H75 I31 J14 J24 J26 O12 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2022-11
New Economics Papers: this item is included in nep-age, nep-cna and nep-neu
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Published - published in: Journal of Economic Behavior & Organization , 2023, 205, 594 - 617

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