Late-career unemployment and cognitive abilities

Diana Freise, Hendrik Schmitz and Matthias Westphal

Journal of Health Economics, 2022, vol. 86, issue C

Abstract: 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.

Keywords: Cognitive abilities; Mental health; Unemployment; Event studies; Plant closures (search for similar items in EconPapers)
JEL-codes: C21 I1 J14 J24 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:86:y:2022:i:c:s0167629622001047

DOI: 10.1016/j.jhealeco.2022.102689

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