Do Pension Benefits Accelerate Cognitive Decline? Evidence from Rural China

Arbeitspapier

Economists have mainly focused on human capital accumulation, rather than on the causes and consequences of human capital depreciation in late adulthood. To investigate how human capital depreciates over the life cycle, we examine how a newly introduced pension program, the National Rural Pension Scheme, affects cognitive performance in rural China. We find significant adverse effects of access to pension benefits on cognitive functioning among the elderly. We detect the most substantial impact of the program on delayed recall, a cognition measure linked to the onset of dementia. In terms of mechanisms, we find that cognitive deterioration in late adulthood is mediated by a substantial reduction in social engagement, volunteering, and activities fostering mental acuity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 15742

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Human Capital; Skills; Occupational Choice; Labor Productivity ; General Welfare; Well-Being ; Microeconomic Analyses of Economic Development ; Retirement; Retirement Policies ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; State and Local Government: Health; Education; Welfare; Public Pensions
• Subject: middleincome countries ; cognition ; cognitive functioning ; human capital ; life cycle ; LMICs ; developing countries

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nikolov, Plamen ; Hossain, Md Shahadath
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/267479
• Last update: 10.03.2025, 11:42 AM CET