We are grateful to Luigi Guiso and Tom Crossley for comments on an earlier draft of this article and to the US National Institute on Ageing and the UK Economic and Social Research Council for funding this research. Data from the English Longitudinal Study of Ageing (ELSA) were supplied by the ESRC Data Archive. ELSA was developed by researchers based at University College London, the Institute for Fiscal Studies and the National Centre for Social Research, with funding provided by the US National Institute on Aging and a consortium of UK government departments coordinated by the Office for National Statistics. Responsibility for interpretation of the data, as well as for any errors, is the authors’ alone.
Cognitive Function, Numeracy and Retirement Saving Trajectories*
Article first published online: 19 OCT 2010
© 2010 TheAuthor(s). The Economic Journal © 2010 Royal Economic Society
The Economic Journal
Volume 120, Issue 548, pages F381–F410, November 2010
How to Cite
Banks, J., O ’Dea, C. and Oldfield, Z. (2010), Cognitive Function, Numeracy and Retirement Saving Trajectories. The Economic Journal, 120: F381–F410. doi: 10.1111/j.1468-0297.2010.02395.x
- Issue published online: 19 OCT 2010
- Article first published online: 19 OCT 2010
- Date of submission: December 20009 Date of decision: July 2010
This article examines the extent to which cognitive abilities relate to differences in trajectories for key economic outcomes as individuals move towards and through their retirement. We look at whether differences in baseline numeracy (measured in the English Longitudinal Study of Ageing in 2002) and broader cognitive ability predict the subsequent trajectories of outcomes such as wealth, retirement income and key dimensions of retirement expectations. Those with lower numeracy are shown to have different wealth trajectories both pre and post-retirement than their more numerate counterparts, but the distributions of retirement expectations and net replacement rates are similar across numeracy groups.