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The Effect of Physical and Cognitive Decline at Older Ages on Job Mismatch and Retirement

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Listed:
  • Péter Hudomiet
  • Michael D. Hurd
  • Susann Rohwedder
  • Robert J. Willis

Abstract

Physical and cognitive abilities of older workers decline with age, which can cause a mismatch between abilities and job demands, potentially leading to early retirement. We link longitudinal Health and Retirement Study data to O*NET occupational characteristics to estimate to what extent changes in workers’ physical and cognitive resources change their work-limiting health problems, mental health, subjective probabilities of retirement, and labor market status. While we find that physical and cognitive decline strongly predict all outcomes, only the interaction between large-muscle resources and job demands is statistically significant, implying a strong mismatch at older ages in jobs requiring large-muscle strength. The effects of declines in fine motor skills and cognition are not statistically different across differing occupational job demands.

Suggested Citation

  • Péter Hudomiet & Michael D. Hurd & Susann Rohwedder & Robert J. Willis, 2018. "The Effect of Physical and Cognitive Decline at Older Ages on Job Mismatch and Retirement," NBER Working Papers 25229, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25229
    Note: AG LS
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    References listed on IDEAS

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    4. Firpo, Sergio & Fortin, Nicole M. & Lemieux, Thomas, 2011. "Occupational Tasks and Changes in the Wage Structure," IZA Discussion Papers 5542, Institute of Labor Economics (IZA).
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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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