Chapter

Cognition and Economic Outcomes in the Health and Retirement Survey

Edited by John J. McArdle, James P. Smith and Robert Willis

in Explorations in the Economics of Aging

Published by University of Chicago Press

Published in print May 2011 | ISBN: 9780226903378
Published online February 2013 | e-ISBN: 9780226903385 | DOI: http://dx.doi.org/10.7208/chicago/9780226903385.003.0008
Cognition and Economic Outcomes in the Health and Retirement Survey

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This chapter looks at the aspect of the socioeconomic status (SES) called health dynamic, focusing on cognitive skills as potentially influencing economic well-being over the life course. The growing participation and saving in 401(k) plans may have created an increased impact on cognition, as individuals must decide for themselves how much to contribute to the plans, and how to invest their accumulated savings among the options available in the plan. The chapter finds that “numeracy,” is by far the most predictive of wealth among all cognitive variables in the Health and Retirement Study (HRS) sample. The association between numeracy and wealth holds for both the financial and nonfinancial respondents, but the magnitude of the estimated impact is much higher for the financial respondent.

Keywords: cognitive skills; retirement; health; retirement; National Growth and Change Study; 401(k) plan; economic well-being

Chapter.  11017 words.  Illustrated.

Subjects: Public Economics

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