TY - JOUR
T1 - Mental retirement and schooling
AU - Bingley, Paul
AU - Martinello, Alessandro
N1 - JEL classification: J26; I12; I20; C26
PY - 2013/10
Y1 - 2013/10
N2 - We assess the validity of differences in eligibility ages for early and old age pension benefits as instruments for estimating the effect of retirement on cognitive functioning. Because differences in eligibility ages across country and gender are correlated with differences in years of schooling, which affect cognitive functioning at old ages, they are invalid as instruments without controlling for schooling. We show by means of simulation and a replication study that unless the model incorporates schooling, the estimated effect of retirement is negatively biased. This explains a large part of the “mental retirement” effects which have recently been found
AB - We assess the validity of differences in eligibility ages for early and old age pension benefits as instruments for estimating the effect of retirement on cognitive functioning. Because differences in eligibility ages across country and gender are correlated with differences in years of schooling, which affect cognitive functioning at old ages, they are invalid as instruments without controlling for schooling. We show by means of simulation and a replication study that unless the model incorporates schooling, the estimated effect of retirement is negatively biased. This explains a large part of the “mental retirement” effects which have recently been found
KW - Faculty of Social Sciences
KW - Cognitive ability
KW - Retirement
KW - Schooling
KW - Cross-country instruments
U2 - 10.1016/j.euroecorev.2013.01.004
DO - 10.1016/j.euroecorev.2013.01.004
M3 - Journal article
SN - 0014-2921
VL - 63
SP - 292
EP - 298
JO - European Economic Review
JF - European Economic Review
ER -