Retirement and Cognitive Decline: Evidence from Global Aging Data

Hiroyuki Motegi, Yoshinori Nishimura and Masato Oikawa

MPRA Paper from University Library of Munich, Germany

Abstract: This study analyzes the effect of retirement on cognitive function. According to the human capital theory, we can hypothesize that workers invest in their cognitive ability more than retirees because cognitive investment increases a worker’s wage. As a result, it is possible that the cognitive ability decreases after retirement, a hypothesis analyzed in this study. In health economics, this hypothesis has been examined especially after 2000. First, we show that an analysis method used in some related studies is not valid for estimating this effect. Furthermore, we analyze this effect by using our method. Our estimates indicate that the workers’ mathematical scores decrease after retirement in a wide range of analyzed countries and heterogeneous groups. However, retirement has a weak effect on cognitive ability. Additionally, we investigate the heterogeneity of this effect. For example, we find that the elderly with higher body mass indexs and fat intake experience a negative effect of retirement on cognitive function.

Keywords: mental retirement; cognitive function; social security; pension eligibility age; cross- country instruments; global aging data (search for similar items in EconPapers)
JEL-codes: I12 I18 J24 J26 (search for similar items in EconPapers)
Date: 2017-01-26
New Economics Papers: this item is included in nep-age and nep-lma
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https://mpra.ub.uni-muenchen.de/77457/1/MPRA_paper_77457.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/84555/1/MPRA_paper_84555.pdf revised version (application/pdf)

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