Mental retirement and schooling

Paul Bingley and Alessandro Martinello

European Economic Review, 2013, vol. 63, issue C, 292-298

Abstract: We assess the validity of differences in eligibility ages for early and old age pension benefits as instruments for estimating the effect of retirement on cognitive functioning. Because differences in eligibility ages across country and gender are correlated with differences in years of schooling, which affect cognitive functioning at old ages, they are invalid as instruments without controlling for schooling. We show by means of simulation and a replication study that unless the model incorporates schooling, the estimated effect of retirement is negatively biased. This explains a large part of the “mental retirement” effects which have recently been found.

Keywords: Cognitive ability; Retirement; Schooling; Cross-country instruments (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (51)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:63:y:2013:i:c:p:292-298

DOI: 10.1016/j.euroecorev.2013.01.004

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