Working Paper: NBER ID: w21484
Authors: Padmaja Ayyagari; David Frisvold
Abstract: Prior literature has documented a positive association between income and cognitive function at older ages, however, the extent to which this association represents causal effects is unknown. In this study, we use an exogenous change in Social Security income due to amendments to the Social Security Act in the 1970s to identify the causal impact of Social Security income on cognitive function of elderly individuals. We find that higher benefits led to significant improvements in cognitive function and that these improvements in cognition were clinically meaningful. Our results suggest that interventions even at advanced ages can slow the rate of decline in cognitive function.
Keywords: Social Security; Cognitive Function; Income; Elderly; Health Economics
JEL Codes: H55; I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social security income (H55) | cognitive function (D91) |
| birth year (J19) | social security income (H55) |
| birth year (J19) | cognitive function (D91) |
| social security income (H55) | likelihood of being classified as demented (D91) |
| social security income (H55) | likelihood of cognitive impairment (D91) |