The Relationship between Cognitive Decline and Early Retirement: A New Approach Using Genetic Material

Amal Harrati, University of California, Berkeley

This study examines the role of cognitive decline in middle age on the decision to withdraw early from the labor force. Understanding the role of cognition on retirement decisions presents challenges to empirical researchers due to the endogeneity between health and labor market participation. The paper’s empirical strategy is to use the genetic variation across individuals as instruments to serve as a source of identification. The paper utilizes a newly released genetic-wide association study (GWAS) from the Health and Retirement Study that includes nearly 2.5 million data points (or SNPs) of genetic material. The paper will provide a careful analysis of cognitive decline in the sample of respondents and its relationship to and implications on retirement decisions. In addition to analyzing the role of cognitive decline on labor market outcomes for middle-aged and elderly Americans, it will discuss the validity and promise of using genetic material in social science research.