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Unique real-world data shows early retirement hastens cognitive decline

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New research from economists at Binghamton University shows early retirement can be linked to an acceleration of age-related cognitive decline. Looking at data from a unique pension program in China, the findings suggest increased social activity may mitigate the cognitive costs of early retirement.

The novel research focused on government heath data from a pension program introduced in China in 2009. Because of rising poverty amongst the elderly in certain rural parts of the country, the program offered people a stable income if they retired within a few years of turning 60.

With a decade of data to study, the researchers were able to compare the health and cognitive consequences of those taking up the early retirement plan with a matched group of people still working through their 60s. The results revealed those participating in the early retirement program showed a worsening of cognitive skills over the subsequent years compared to non-retirees.

However, the more puzzling finding was that while the pension plan participants showed declines in cognition, they also saw improvements in general health. Those early retirees tended to reduce alcohol consumption, quit smoking and generally sleep better. According to Plamen Nikolov, one of the lead researchers on the project, this interesting discordancy between general and cognitive health suggests certain dimensions of retirement seem to specifically negatively influence the brain.

“Overall, the adverse effects of early retirement on mental and social engagement significantly outweigh the program’s protective effect on various health behaviors,” added Nikolov. “Or alternatively, the kinds of things that matter and determine better health might simply be very different from the kinds of things that matter for better cognition among the elderly. Social engagement and connectedness may simply be the single most powerful factors for cognitive performance in old age.”

Social isolation seemed to be the key factor linked with faster cognitive decline among the pension plan participants in the study. Nikolov said those early retirees in the program reported lower levels of general social interaction and engagement compared to age-matched non-retirees. So this suggests certain policies could be implemented to mitigate the cognitive harms of early retirement and maintain the more general health benefits.

“Policymakers can introduce policies aimed at buffering the reduction of social engagement and mental activities,” said Nikolov. “In this sense, retirement programs can generate positive spillovers for the health status of retirees without the associated negative effect on their cognition.”

The research is not the first to highlight the importance of maintaining active social engagements in later life as a way of maintaining cognitive health. A similar 2021 study in European retirees found cognitive benefits from prolonging one’s time in the workforce.

But again, as with Nikolov’s findings, the solution is not that we all should simply work through into older ages. Instead, early retirement can be broadly beneficial as long as social and physical activities are maintained.

The new study was published in the Journal of Economic Behavior & Organization.

Source: Binghamton University




New research from economists at Binghamton University shows early retirement can be linked to an acceleration of age-related cognitive decline. Looking at data from a unique pension program in China, the findings suggest increased social activity may mitigate the cognitive costs of early retirement.

The novel research focused on government heath data from a pension program introduced in China in 2009. Because of rising poverty amongst the elderly in certain rural parts of the country, the program offered people a stable income if they retired within a few years of turning 60.

With a decade of data to study, the researchers were able to compare the health and cognitive consequences of those taking up the early retirement plan with a matched group of people still working through their 60s. The results revealed those participating in the early retirement program showed a worsening of cognitive skills over the subsequent years compared to non-retirees.

However, the more puzzling finding was that while the pension plan participants showed declines in cognition, they also saw improvements in general health. Those early retirees tended to reduce alcohol consumption, quit smoking and generally sleep better. According to Plamen Nikolov, one of the lead researchers on the project, this interesting discordancy between general and cognitive health suggests certain dimensions of retirement seem to specifically negatively influence the brain.

“Overall, the adverse effects of early retirement on mental and social engagement significantly outweigh the program’s protective effect on various health behaviors,” added Nikolov. “Or alternatively, the kinds of things that matter and determine better health might simply be very different from the kinds of things that matter for better cognition among the elderly. Social engagement and connectedness may simply be the single most powerful factors for cognitive performance in old age.”

Social isolation seemed to be the key factor linked with faster cognitive decline among the pension plan participants in the study. Nikolov said those early retirees in the program reported lower levels of general social interaction and engagement compared to age-matched non-retirees. So this suggests certain policies could be implemented to mitigate the cognitive harms of early retirement and maintain the more general health benefits.

“Policymakers can introduce policies aimed at buffering the reduction of social engagement and mental activities,” said Nikolov. “In this sense, retirement programs can generate positive spillovers for the health status of retirees without the associated negative effect on their cognition.”

The research is not the first to highlight the importance of maintaining active social engagements in later life as a way of maintaining cognitive health. A similar 2021 study in European retirees found cognitive benefits from prolonging one’s time in the workforce.

But again, as with Nikolov’s findings, the solution is not that we all should simply work through into older ages. Instead, early retirement can be broadly beneficial as long as social and physical activities are maintained.

The new study was published in the Journal of Economic Behavior & Organization.

Source: Binghamton University

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