Aging, cognitive abilities and retirement in Europe

Mazzonna FabrizioPeracchi Franco
CEIS Research Paper
We investigate the relationship between aging, cognitive abilities and retirement using the Survey on Health, Aging and Retirement in Europe (SHARE), a longitudinal survey that offers the possibility of comparing several European countries using nationally representative samples of the population aged 50+. We use a version of the model proposed by Grossman (1972) as a guide for our empirical specification of the age-profile of cognitive abilities. According to the model, retirement plays a fundamental role in explaining the process of cognitive deterioration. Our empirical results confirm this key prediction. They also indicate that education plays a fundamental role in explaining heterogeneity in the level of cognitive abilities.
Number: 152
Keywords: Aging; cognitive abilities; retirement; education; SHARE;
JEL codes: J14 - J24 - C23
Date: Friday, December 4, 2009
Revision Date: Friday, December 4, 2009