Study links job loss in later life to faster cognitive decline

A new National Bureau of Economic Research working paper says leaving work in later life can speed cognitive decline among Americans ages 51 to 75. The finding adds a health risk to the financial and labor-market concerns facing older workers who retire early or lose jobs before traditional retirement age.

The May paper, written by University of California, Irvine economists, found that people who remained employed had stronger sustained cognition than those who exited work. David Neumark, a UC Irvine economics professor and co-author of the study, told Fortune the results are another reason to worry about broad drops in employment among older workers.

The researchers used data on 40,000 participants in the University of Michigan’s Health and Retirement Study, which tracks people over time and includes measures of cognitive ability. They compared those records with U.S. Census County Business Patterns data to examine what happened after large negative shocks to labor demand.

The study found sizable declines in cognitive scores after significant local employment downturns, according to the working paper. The economists said their approach was meant to move beyond earlier research that had shown a correlation between retirement and cognitive decline, and instead test whether loss of employment itself played a causal role.

Older workers face financial and health pressures

The findings land as many older Americans face long spells outside work. An April 2025 analysis found that about 35% of workers unemployed for more than 24 weeks were older than 55.

Retirement patterns have also shifted. Stanford Center on Longevity research cited by Fortune says the retirement age for men has moved lower over the past 35 years, and about half of retirees report that they chose to stop working.

Early retirement can strain household finances. The Center on Budget and Policy Priorities says few retirees have pension income outside Social Security, while the Social Security Administration puts the average benefit at about $18,000 a year. Workers who claim Social Security at 62 receive less than those who wait until 70, according to Fortune’s summary of the retirement issue.

Neumark told Fortune that cognitive decline also brings heavy public and private costs. A University of Southern California analysis estimated that Alzheimer’s disease and other dementias would cost the U.S. economy $781 billion in 2025, including care costs and lost earnings for patients and caregivers.

The Alzheimer’s Association projected direct health and long-term-care costs of $384 billion to $409 billion in 2025 and 2026, according to Fortune. It also estimated $413.5 billion in unpaid caregiving in 2025.

Policy options focus on staying attached to work

An aging population can weigh on economic output as well. A 2016 NBER study projected that annual GDP growth would slow by 1.2% from 2016 to 2026 because of population aging, with about one-third of the effect tied to fewer older people working and most of the rest tied to lower productivity among older workers.

Neumark told Fortune that employers and policymakers could do more to keep older workers connected to jobs. He pointed to flexible schedules and phased retirement programs, along with existing retraining and trade-adjustment efforts.

He also cited Social Security Disability Insurance as an area where some workers may be able to return to employment. Social Security research says about 28% of SSDI recipients try to go back to work within 10 years of receiving benefits, though Fortune noted that some recipients cannot return because of permanent disability.

Neumark said broader awareness of the cognitive risks tied to being out of work could affect decisions by people considering early retirement. He told Fortune that policy can influence both whether people lose jobs and how quickly they find new work after they do.

This story draws on original reporting from Fortune.