Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Mental Retirement
Journal of Economic Perspectives
(pp. 119–38)
(Complimentary)
Abstract
Early retirement appears to have a significant negative impact on the cognitive ability of people in their early 60s that is both quantitatively important and causal. We obtain this finding using cross-nationally comparable survey data from the United States, England, and Europe that allow us to relate cognition and labor force status. We argue that the effect is causal by making use of a substantial body of research showing that variation in pension, tax, and disability policies explain most variation across countries in average retirement rates. (In an informal manner, we are arguing that public policies that affect the age of retirement may be used as instrumental variables to generate cross-country variation in retirement behavior in order to identify the causal effect of retirement on cognition.)Citation
Rohwedder, Susann, and Robert J. Willis. 2010. "Mental Retirement." Journal of Economic Perspectives 24 (1): 119–38. DOI: 10.1257/jep.24.1.119Additional Materials
JEL Classification
- H55 Social Security and Public Pensions
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
- J26 Retirement; Retirement Policies