The dynamic and heterogeneous effects of retirement on cognitive decline

Hendrik Schmitz and Matthias Westphal

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.

MoreLess

Year of publication:	2021
Authors:	Schmitz, Hendrik ; Westphal, Matthias
Publisher:	Essen, Germany : RWI - Leibniz-Institut für Wirtschaftsforschung
Subject:	Cognitive abilities \| retirement \| event study \| marginal treatment effects \| Kognition \| Cognition \| Altersgrenze \| Retirement \| Wirkungsanalyse \| Impact assessment \| Altersvorsorge \| Retirement provision \| Kausalanalyse \| Causality analysis