Does (re-)entering the labour market at advanced ages protect against cognitive decline? A matching difference-in-differences approach.

Background: While prolonged labour market participation becomes increasingly important in ageing societies, evidence on the impacts of entering or exiting work beyond age 65 on cognitive functioning is scarce.

Methods: We use data from two large population-representative data sets from South Korea and the USA to investigate and compare the effects of the labour market (re-)entry and exit by matching employment and other confounder trajectories prior to the exposure. We chose the Korean Longitudinal Study of Aging (N=1872, 2006-2020) for its exceptionally active labour participation in later life and the Health and Retirement Study (N=4070, 2006-2020) for its growing inequality among US older adults in labour participation. We use the matching difference-in-differences (DID) method, which allows us to make causal claims by reducing biases through matching.

Results: We find general positive effects of entering the labour market in South Korea (DID estimate: 0.653, 95% CI 0.167 to 1.133), while in the USA such benefit is not salient (DID estimate: 0.049, 95% CI -0.262 to 0.431). Exiting the late-life labour market leads to cognitive decline in both South Korea (DID estimate: -0.438, 95% CI -0.770 to -0.088) and the USA (DID estimate: -0.432, 95% CI -0.698 to -0.165).

Conclusions: Findings suggest that Korean participants cognitively benefited from late-life labour market participation, while US participants did not. Differences in participant characteristics and reasons for labour market participation may have led to the differential findings. We found the negative effects of exiting the late-life labour force in both countries.