Late-career unemployment and cognitive abilities

Diana Freise, Hendrik Schmitz and Matthias Westphal ()

No 965, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

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
New Economics Papers: this item is included in nep-hea and nep-neu
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:965

DOI: 10.4419/96973129

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