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The dynamic and heterogeneous effects of retirement on cognitive decline

Hendrik Schmitz and Matthias Westphal

No 918, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: We study effects of retirement on cognitive abilities (up to ten years after retirement) using data from 21 countries in Continental Europe, England, and the US, and exploiting early-retirement thresholds for identification. For this purpose, combines event-study estimations with the marginal treatment effect framework to allow for effect heterogeneity. This helps to decompose event-study estimates into true medium-run effects of retirement and effects driven by differential retirement preferences. Our results suggest considerable negative effects of retirement on cognitive abilities. We also detect substantial effect heterogeneity: Those who retire as early as possible are not affected while those who retire later exhibit negative effects.

Keywords: Cognitive abilities; retirement; event study; marginal treatment effects (search for similar items in EconPapers)
JEL-codes: C31 J14 J24 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-age and nep-neu
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:918

DOI: 10.4419/96973064

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