Understanding cognitive decline in older ages: The role of health shocks

Valentin Schiele and Hendrik Schmitz

No 919, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Individual cognitive functioning declines over time. We seek to understand how adverse physical health shocks in older ages contribute to this development. By use of event-study methods and data from the USA, England and several countries in Continental Europe we find evidence that health shocks lead to an immediate and persistent decline in cognitive functioning. This robust finding holds in all regions representing different health insurance systems and seems to be independent of underlying individual demographic characteristics such as sex and age. We also ask whether variables that are susceptible to policy action can reduce the negative consequences of a health shock. Our results suggest that neither compulsory education nor retirement regulations moderate the effects, thus emphasizing the importance of maintaining good physical health in old age for cognitive functioning.

Keywords: Cognitive decline; health shocks; retirement; education; event study (search for similar items in EconPapers)
JEL-codes: I1 I12 J14 J2 J24 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-age, nep-eur, nep-hea, nep-ias, nep-lma and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Understanding cognitive decline in older ages: The role of health shocks (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:919

DOI: 10.4419/96973065

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