How do Changes in Health and Cognition Affect the Timing of Retirement? Evidence from Occupational Job Demands and Job Mismatch

As workers age, physical health and cognitive abilities tend to decline. Depending on job characteristics, this decline could lead to a deterioration of the match between worker’s abilities and the demands of the job. We propose to use Health and Retirement Study data to investigate the evolution of this potential mismatch and how it affects retirement outcomes. Declines in health and cognitive abilities strongly predict retirement outcomes, partly because such declines make workers less productive and work more burdensome. We will investigate how these effects interact with job characteristics. In an advance over previous literature, we will use as outcomes both a measure of retirement expectations and actual retirement, permitting fixed effect estimations that control for the initial conditions resulting from job sorting earlier in life.