Retirement and Cognitive Decline: Evidence from Global Aging Data

Motegi, Hiroyuki and Nishimura, Yoshinori and Oikawa, Masato (2017): Retirement and Cognitive Decline: Evidence from Global Aging Data.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: mental retirement, cognitive function, social security, pension eligibility age, cross- country instruments, global aging data
• Subjects: I - Health, Education, and Welfare > I1 - Health > I12 - Health Behavior; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J26 - Retirement ; Retirement Policies

References

Adam, S., Bay, C., Bonsang, E., Germain, S., and Perelman, S. (2006). Occupational ac- tivities and cognitive reserve: a frontier approach applied to the Survey on Health, Ageing, and Retirement in Europe (SHARE). CREPP Working Paper 2006/05.

Altonji, J. G., Blom, E., and Meghir, C. (2012). Heterogeneity in Human Capital Investments : High School Curriculum , College Major, and Careers. The Annual Review of Economics, (4):185–223.

Behncke, S. (2012). Does Retirement Trigger Ill Health? Health economics, 21:282–300.

Ben-Porath, Y. (1967). The Production of Human Capital and the Life Cycle of Earnings. The Journal of Political Economy, 75(4):352–365.

Bingley, P. and Martinello, A. (2013). Mental retirement and schooling. European Economic Review, 63:292–298.

Bonsang, E., Adam, S., and Perelman, S. (2012). Does retirement affect cognitive functioning? Journal of Health Economics, 31(3):490–501.

Bound, J. and Waidmann, T. (2007). Estimating the Health Effects of Retirement. University of Michigan Retirement Research Center Working Papers.

Charles, K. K. (2004). Is Retirement Depressing?: Labor Force Inactivity and Psychological Well being in Later Life. Research in Labor Economics, 23:269–299.

Coe, N. B., Gaudecker, H.-M. V., Lindeboom, M., and Maurer, J. (2012). The Effect Of Retirement On Cognitive Functioning. Health Economics, 21:913–927.

Coe, N. B. and Lindeboom, M. (2008). Does Retirement Kill You? Evidence from Early Retirement Windows. IZA Discussion Papers, 93.

Coe, N. B. and Zamarro, G. (2011). Retirement effects on health in Europe. Journal of Health Economics, 30(1):77–86.

Dave, D., Rashad, I., and Spasojevic, J. (2008). The Effects of Retirement on Physical and Mental Health Outcomes. Southern Economic Journal, 75(2):497–523.

Devore, E. E., Stampfer, M. J., Breteler, M. M. B., Rosner, B., Kang, J. H., Okereke, O., Hu, F. B., and Grodstein, F. (2009). Dietary fat intake and cognitive decline in women with type 2 diabetes. Diabetes Care, 32(4):635–640.

Dik, M. G., Deeg, D. J., Visser, M., and Jonker, C. (2003). Early Life Physical Activity and Cognition at Old Age. Journal of Clinical and Experimental Neuropsychology, 25(5):643–653.

Eskelinen, M. H., Ngandu, T., Helkala, E. L., Tuomilehto, J., Nissinen, A., Soininen, H., and Kivipelto, M. (2008). Fat intake at midlife and cognitive impairment later in life: A population-based CAIDE study. International Journal of Geriatric Psychiatry, 23(7):741–747.

Grossman, M. (1972). On the Concept of Health Capital and the Demand for Health. Journal of Political Economy, 80(2):223–255.

Gruber, J. and Wise, D. A. (1998). Social Security and Retirement: An International Comparison. American Economic Review, Papers and Proceedings of the Hundred and Tenth Annual Meeting of the American Economic Association, 88(2):158–163.

Hashimoto, H. (2013). Health Consequences of Transitioning to Retirement and Social Par- ticipation: Results based on JSTAR panel data. RIETI Discussion Paper Series 13-E-078.

Hashimoto, H. (2015). Impacts of Leaving Paid Work on Health, Functions, and Lifestyle Be- havior: Evidence from JSTAR panel data. RIETI Discussion Paper Series 15-E-114.

Hernaes, E., Markussen, S., Piggott, J., and Vestad, O. L. (2013). Does retirement age impact mortality? Journal of Health Economics, 32(3):586–598.

Insler, M. (2014). The Health Consequences of Retirement. Journal of Human Resources, 49(1):195–233.

Johnston, D. W. and Lee, W.-S. (2009). Retiring to the good life? The short-term effects of retirement on health. Economics Letters, 103(1):8–11.

Kajitani, S. (2011). Working in old age and health outcomes in Japan. Japan and The World Economy, 23:153–162.

Kajitani, S., Sakata, K., and McKenzie, C. (2013). Does the Definition of Retirement Matter in Estimating the Effects of Retirement on Cognitive Functioning? 20th International Congress on Modelling and Simulation, Adelaide, Australia, 1-6 December 2013, pages 153–162.

Kajitani, S., Sakata, K., and McKenzie, C. (2014). Occupation, Retirement and Cognitive Functioning. Discussion Paper Series Graduate School and School of Economics Meisei University, Discussion Paper Series, No.27.

Kajitani, S., Sakata, K., and McKenzie, C. (2016a). Occupation, retirement and cognitive functioning. Ageing and Society, May 2016:1–29.

Kajitani, S., Sakata, K., and McKenzie, C. (2016b). Use It Too Much and Lose It? The Effect of Working Hours on Cognitive Ability. Melbourne Institute Working Paper, No. 7/16.

Kerkhofs, M. and Lindeboom, M. (1997). Age related health dynamics and changes in labour market status. Health economics, 6(4):407–423. Latif, E. (2011). The impact of retirement on psychological well-being in Canada. Journal of Socio-Economics, 40(4):373–380.

Lindeboom, M., Portrait, F., and Van Den Berg, G. J. (2002). An econometric analysis of the mental-health effects of major events in the life of older individuals. Health Economics, 11(6):505–520.

Mazzonna, F. and Peracchi, F. (2012). Ageing, cognitive abilities and retirement. European Economic Review, 56(4):691–710.

McEwen, B. S. and Sapolsky, R. M. (1995). Stress and Cognitive Function. Current Opinion in Neurobiology, 5:205–216.

Neuman, K. (2008). Quit your job and get healthier? The effect of retirement on health. Journal of Labor Research, 29(2):177–201.

Nishimura, Y. and Oikawa, M. (2017). Effect of Retirement Duration on Cognitive Ability in the US. Mimeo.

Nyberg, L., Habib, R., and Herlitz, A. (2000). Brain activation during episodic memory retrieval: Sex differences. Acta Psychologica, 105:181–194.

Nyberg, L., Lovden, M., Riklund, K., Lindenberger, U., and Backman, L. (2012). Memory aging and brain maintenance. Trends in Cognitive Sciences, 16(5):292–305.

Potter, G. G., Helms, M. J., and Plassman, B. L. (2008). Associations of job demands and intelligence with cognitive performance among men in late life. Neurology,70(19):1803–1808.

Raji, C., Merrill, D., Eyre, H., Mallam, S., Torosyan, N., Erickson, K., Lopez, O., Becker,J., Carmichael, O., Gach, H., Thompson, P., Longstreth, W., and Kuller, L. (2016). Longitudinal Relationships between Caloric Expenditure and Gray Matter in the Cardiovascular Health Study. Journal of Aalzheimers Disease, 52:719–729.

Rendall, A., Rendall, M., Rendall, A., and Rendall, M. (2014). Math Matters : Education Choices and Wage Inequality Math Matters : Education Choices and Wage Inequality. University of Zurich Department of Economics Working Paper Series, (May).

Rohwedder, S. and Willis, R. J. (2010). Mental Retirement. Journal of Economic Perspectives, 24(1):119–138.

Rose, H. and Betts, J. R. (2004). The effect of high school courses on earnings. The Review of Economics and Statistics, 86(May):497–513.

Satizabal, C. L., Beiser, A. S., Chouraki, V., Chene, G., Dufouil, C., and Seshadri, S. (2016). Incidence of Dementia over Three Decades in the Framingham Heart Study. The New England Journal of Medicine, 374:523–532.

Scarmeas, N. and Stern, Y. (2003). Cognitive Reserve and Lifestyle. Journal of Clinical and Experimental Neuropsychology, 25(5):483–506.

Schooler, C., Mulatu, M. S., and Oates, G. (1999). The continuing effects of substantively complex work on the intellectual functioning of older workers. Psychology and Aging, 14(3):483–506.

Sindi, S., Hagman, G., H ̊akansson, K., Kulmala, J., Nilsen, C., K ̊areholt, I., Soininen, H., Solomon, A., and Kivipelto, M. (2016). Midlife Work-Related Stress Increases Dementia Risk in Later Life: The CAIDE 30-Year Study. The Journals of Gerontology Series B: Psychological Sciences and Social Sciences,00(00):gbw043.

Verghese, J., Lipton, R. B., Katz, M. J., Hall, C. B., Derby, C. A., Kuslansky, G., Ambrose, A. F. M., Sliwinski, M., and Buschke, H. (2003). Leisure Activities and the Risk of Dementia in the Elderly. The New England Journal of Medicine, 348(5):2508–2516.

Wilson, R. S., Barnes, L. L., and Bennett, D. A. (2003). Assessment of Lifetime Partici- pation in Cognitively Stimulating Activities. Journal of Clinical and Experimental Neuropsychology, 25(5):634–642.