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. 2011 Nov;120(548):F381-F410.
doi: 10.1111/j.1468-0297.2010.02395.x.

Cognitive function, numeracy and retirement saving trajectories

James Banks  1 , Cormac O'Dea, Zoë Oldfield
Affiliations

Cognitive function, numeracy and retirement saving trajectories

James Banks et al. Econ J (London). 2011 Nov.

Abstract

This paper 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.

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Figures

Figure 1
Figure 1
a: Broad numeracy score, by age and education: Men Source: Banks and Oldfield (2007) b: Broad numeracy score, by age and education: Women Source: Banks and Oldfield (2007)
Figure 2
Figure 2
Mean real net financial wealth profiles by date of birth and broad numeracy cohort Source: Authors’ calculations using data from English Longitudinal Study of Ageing 2002 and 2006
Figure 3
Figure 3
Quantiles of real net financial wealth over age, by date of birth and broad numeracy cohort Source: Authors’ calculations using data from English Longitudinal Study of Ageing 2002 and 2006
Figure 4
Figure 4
Accuracy of future work expectations: Proportion in work in 2006, by per cent chances in 2002 Source: Authors’ calculations using data from English Longitudinal Study of Ageing 2002 and 2006
See this image and copyright information in PMC

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