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Does postponing retirement affect cognitive function? A counterfactual experiment to disentangle life course risk factors

Jo Mhairi Hale, Maarten J. Bijlsma and Angelo Lorenti
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Jo Mhairi Hale: Max Planck Institute for Demographic Research, Rostock, Germany
Maarten J. Bijlsma: Max Planck Institute for Demographic Research, Rostock, Germany
Angelo Lorenti: Max Planck Institute for Demographic Research, Rostock, Germany

No WP-2020-013, MPIDR Working Papers from Max Planck Institute for Demographic Research, Rostock, Germany

Abstract: Life-course sociodemographic and behavioral factors affect later-life cognitive function. Some evidence suggests that contemporaneous labor force participation also affects cognitive function; however, it is unclear whether it is employment itself or endogenous factors related to individuals’ likelihood of employment that protects against cognitive decline. We exploit innovations in counterfactual causal inference to disentangle the effect of postponing retirement on later-life cognitive function from the effects of other life-course factors. With the U.S. Health and Retirement Study (1996-2014, n=20,469), we use the parametric g-formula to estimate the population-averaged effect (PAE) of postponing retirement to age 67, the average treatment on the treated (ATT), the moderating effect of gender, education, and occupation, and the mediating effect via depressive symptoms and comorbidities. We find that postponing retirement is protective against cognitive decline, accounting for other life-course factors (age 67 PAE: 0.34, 95% confidence interval (CI): 0.20,0.47; ATT: 0.43, 95% CI: 0.26,0.60). The extent of the protective effect depends on subgroup, with the highest educated experiencing the greatest reduction in cognitive decline (age 67 ATT: 50%, 95% CI: 32%,71%). By using innovative models that better reflect the empirical reality of interconnected life-course processes, this work makes progress in understanding how retirement affects cognitive function.

Keywords: America; age at retirement; ageing; labor; length of working life; retirement (search for similar items in EconPapers)
JEL-codes: J1 Z0 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2020
New Economics Papers: this item is included in nep-age, nep-dem and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:dem:wpaper:wp-2020-013

DOI: 10.4054/MPIDR-WP-2020-013

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