BINGHAMTON, NY — Early retirement may accelerate cognitive decline in older adults, according to a study by professors at Binghamton University, State University of New York.
Plamen Nikolov, Assistant Professor of Economics, and Shahadath Hossain, Ph.D. in Economics, both from Binghamton University, examined China’s New Rural Pension Scheme (NRPS) and China’s Longitudinal Health and Retirement Survey (CHARLS) to determine how retirement plans affect cognitive abilities. performance among plan participants. CHARLS, a nationally representative survey of people aged 45 and over in the Chinese population, directly tests cognition with a focus on episodic memory and components of intact mental state.
With longer life expectancy and declining fertility in developing countries, the elderly population has become the most important demographic source in Asia and Latin America, generating an urgent need for new sustainable pension systems. However, Nikolov’s research suggests that these retirement plans can have unintended downstream consequences. In a new study, Nikolov’s team shows that access to pension plans may play an important role in explaining cognitive decline at older ages.
“Because of this big population boom, China has introduced a formal pension program (called NRPS) in rural parts of the country. The program was introduced due to the rapid increase in the aging population in China and with the aim of reducing poverty among the elderly,” Nikolov said. “In rural parts of the country, traditional family care for the elderly had largely broken down, with no adequate formal mechanisms to replace it. For older people, inadequate transfers from informal family and community transfers could significantly reduce their ability to cope with illness or poor nutrition.
The researchers obtained administrative data from the Chinese government on the implementation of the pension program. They gained access to an additional survey data source, which detailed the behavior and socioeconomic characteristics of participants in the new retirement program. Nikolov and his research team found that the new program had significant adverse effects on cognitive functioning in older adults. The most significant indicator of cognitive decline was delayed recall, a measure widely implicated in neurobiological research as an important predictor of dementia. The retreat program had more negative effects in women, and Nikolov said the results support the mental retreat hypothesis that a decrease in mental activity leads to a deterioration in cognitive abilities.
While Nikolov and his co-authors found that pension benefits and retirement led to better health, the program also induced a marked and much more negative influence on other dimensions: social activities, activities associated with mental fitness and social engagement.
“Program participants report significantly lower levels of social engagement, with significantly lower rates of volunteering and social interaction than non-recipients. We find that increased social isolation is strongly linked to faster cognitive decline in older people. Interestingly, we found that the program improved some health-related behaviors. Program participants reported a reduced incidence of regular alcohol consumption compared to the previous year. Overall, the detrimental effects of early retirement on mental and social engagement far outweigh the protective effect of the program on various health behaviors,” Nikolov said. “Or alternatively, the kinds of things that matter and determine better health might just be very different from the kinds of things that matter for better cognition in older people. Social engagement and connectedness may simply be the most powerful determinants of cognitive performance in older adults.
Many policy decisions involve careful consideration of cause and effect. But understanding cause and effect in the context of economic or political issues is often hampered because controlled experiments – such as randomized controlled trials (RCTs) – may not always be practically or ethically possible. In such cases, “economists often turn to a method called natural experiments,” Nikolov explained. Natural experiments involve the use of random events or situations when real life mimics controlled experiments. Based on this method, Nikolov and his team studied the impact of the decision to retire on cognition, since the research team was able to compare the situation of people of similar age and socioeconomic characteristics to those of similar individuals, but in areas where the retirement program did not exist.
“Individuals in areas that implement the NRPS score significantly lower than those living in areas that do not offer the NRPS program,” Nikolov said. “In the almost 10 years since its implementation, the program has caused declines in cognitive performance of up to nearly one-fifth of a standard deviation on the memory measures we examine.”
Surprisingly, the estimated impacts of the program were similar to negative findings regarding the same phenomenon, but in higher income countries such as America, England and the European Union, which Nikolov says demonstrates that retirement affects people in different fields in more similar patterns than we previously thought. .
“We were surprised to find that pension benefits and retirement actually led to a decrease in cognitive performance. In another study, we found a very strong conclusion that the introduction of superannuation and retirement benefits resulted in positive health benefits via improved sleep and reduced alcohol consumption and smoking,” he said. “The fact that retirement led to reduced cognitive performance in itself is a stark finding on an unsuspected and puzzling issue, but one with hugely important well-being implications for quality of life in old age. “
Nikolov said he hopes this research will help create new policies to improve the cognitive functioning of older generations during retirement.
“We hope that our results will influence how retirees view their retirement activities from a more holistic perspective and pay particular attention to their social engagement, active volunteering and participation in activities that promote their mental acuity. “, Nikolov said. “But we also hope to influence policy makers. We show strong evidence that retirement has significant benefits. But this also has considerable costs. Cognitive impairment in older adults, while not severely debilitating, results in loss of quality of life and can negatively impact well-being. Policy makers can introduce policies to cushion the reduction in social engagement and mental activities. In this sense, retirement programs can generate positive effects on the health status of retirees without the associated negative effect on their cognition.
Nikolov plans to continue researching this topic and examining how the introduction of retirement benefits led to labor market participation responses among older people in rural China.
The paper, “Do retirement benefits accelerate cognitive decline in late adulthood? Proof of rural China”, was published in the Journal of Economic Behavior and Organization.”
Journal of Economic Behavior and Organization
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Do retirement benefits accelerate cognitive decline in late adulthood? Evidence from rural China
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