It’s a familiar tale. A person retires after a lifetime of hard work, only to fall ill, or even die, within a few months. They never have the chance to enjoy their hard-earned retirement.

Now researchers have examined this frustrating connection, and have found that people who retire early experience some health benefits. They sleep better and have lower rates of smoking and alcohol consumption. But retirement can also lead to a decline in brain function, which can be an early indication of dementia.

Study looks at new pension in China

In 2009, China introduced the New Rural Pension Scheme to help tackle some of the demographic challenges the country was facing – the ageing population, the decline of traditional old-age security, and poverty in rural areas.

Plamen Nikolov, assistant professor of economics, explained it this way in an interview with Binghamton University.

“Because of this large demographic boom, China introduced a formal pension program (called NRPS) in rural parts of the country. The program was introduced on the basis of an economy’s needs and capacity, in particular to alleviate poverty in old age.”

The researchers looked at how receiving the NPRS affected memory and ‘mental status’ by testing those who were receiving the pension and those who were not.

Memory function declined

Alarmingly, the researchers found the pension had a “significantly negative effect” on the cognitive abilities of people aged 60 years and older.

“Individuals in the areas that implement the NRPS score considerably lower than individuals who live in areas that do not offer the NRPS program,” the authors of research report wrote.

They found that people aged 60 and above who went on the pension experienced delayed recall and a deterioration in their immediate recall and total word recall. 

Worryingly, delayed recall, which involves the person recalling a list of 10 nouns read aloud after 5 minutes, is one of the largest declines recorded in the research and is one of the most significant indicators of Alzheimer’s disease and dementia. 

Pension also has health benefits

“We were surprised to find that pension benefits and retirement actually resulted in reduced cognitive performance,” Mr Nikolov said.  

Previous studies in other countries have also revealed retirement’s negative impacts on brain function, but similar studies in China have shown that the pension has also led to better health outcomes.

“In a different study we found a very robust finding that the introduction of pension benefits and retirement led to positive health benefits via improvements in sleep and the reduction of alcohol consumption and smoking,” Mr Nikolov said. 

“For cognition among the elderly, it looks like the negative effect on social engagement far outweighed the positive effect of the program on nutrition and sleep,” Mr Nikolov said. 

“Or alternatively, the kinds of things that matter and determine better health might simply be very different than the kinds of things that matter for better cognition among the elderly. Social engagement and connectedness may simply be the single most powerful factors for cognitive performance in old age,” he said.

Women’s mental acuity declined the most

The association between mental decline and receiving the pension was the greatest for women.

“The effect of the NRPS program is considerably more negative among females in rural China,” the report’s authors wrote. 

“Our findings suggest that early retirement is likely to… result in lower healthy life expectancy among women in rural China,” they said.

Retirement has benefits – and costs

The findings show the benefits of policies aimed at encouraging older people to remain engaged and active into their twilight years, not only to improve cognitive function, but to enhance quality of life.

“We show robust evidence that retirement has important benefits. But it also has considerable costs,” Mr Nikolov said.

“Cognitive impairments among the elderly, even if not severely debilitating, bring about a loss of quality of life and can have negative welfare consequences,” the report’s authors wrote.

“Policies aimed at facilitating or promoting physical activity or labor force participation, even in older ages, are likely to generate positive spillovers,” they said.

Mr Mikolov said policies aimed at encouraging social engagement and mental activity could also help to counteract some of the negative effects of retirement.

“We hope our findings will influence retirees themselves but perhaps, more importantly, it will influence policymakers,” he said.

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