Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247686 
Year of Publication: 
2021
Series/Report no.: 
Ruhr Economic Papers No. 919
Publisher: 
RWI - Leibniz-Institut für Wirtschaftsforschung, Essen
Abstract: 
Individual cognitive functioning declines over time. We seek to understand how adverse physical health shocks in older ages contribute to this development. By use of event-study methods and data from the USA, England and several countries in Continental Europe we find evidence that health shocks lead to an immediate and persistent decline in cognitive functioning. This robust finding holds in all regions representing different health insurance systems and seems to be independent of underlying individual demographic characteristics such as sex and age. We also ask whether variables that are susceptible to policy action can reduce the negative consequences of a health shock. Our results suggest that neither compulsory education nor retirement regulations moderate the effects, thus emphasizing the importance of maintaining good physical health in old age for cognitive functioning.
Subjects: 
Cognitive decline
health shocks
retirement
education
event study
JEL: 
J24
J14
I1
I12
J2
Persistent Identifier of the first edition: 
ISBN: 
978-3-96973-065-2
Document Type: 
Working Paper

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