Role of Pro-social behavior in the causal pathway from Economic conditions early in life to cognitive decline in the elderly

Adverse early life conditions predict cognitive aging, with severe individual, household and societal negative wealth and welfare consequences, but the causal relationship remains unclear. Cognitive decline at older ages is further aggravated by retirement. Loss of an ‘engaged lifestyle’ including a work related social network upon retirement is suggested to underlay the sharp decline in cognitive function immediately following separation from work. This study investigates the role of pro-social behavior, particularly volunteering, as an alternative avenue for mental engagement that helps mitigate cognitive aging post-retirement.

Using seven waves of the Health and Retirement Study, with data on volunteering and cognitive health, along with business cycle conditions as exogenous indicators of individual early-life conditions this study pins down the degree to which an economically bad start in life influences an individual’s pro-socialization and long-run cognitive function. Specifically, we (1) estimate the causal effect of volunteering on late life cognitive decline.  Individual fixed effects estimation using panel data acknowledge and control for potential confounding unobserved factors like early-life conditions and individual conscientiousness, thereby allowing causal inference. The results are informative on the extent to which elderly individuals can use volunteering as a protective mechanism against age associated cognitive decline.

(2) Next, we estimate the causal effect of early life conditions on adult pro-social behavior and old age cognitive function. By estimating a reduced form causal effects regression we go beyond existing cross sectional evidence of the crucial role of early life conditions such as parental income in determining old age cognitive decline and adult pro-social behavior. Second, we illustrate, by example, the existence of a time constant confounder – namely early life conditions - of pro-social behavior and old age cognitive function. In doing so we demonstrate the endogeneity of pro-social behavior within an individual’s lifetime that impedes causal interpretation of correlation results.

 

Our study goes beyond earlier research by illustrating that early-life conditions are a causal determinant of pro-social behavior and cognitive aging. Furthermore, by estimating the interaction between pro-social behavior and early-life conditions as joint determinants of cognitive decline at higher ages our results show that the negative consequences of a disadvantaged childhood can be compensated by deliberate social behavior at prime age, and enumerate the degree to which such a pathway is used by those for whom the gains are highest.