Many parents of young school-aged kids will inevitably endure the question, “Why do I have to go to school?” Children are aware that school is a costly investment! Their parents anticipate that schooling offers long-term benefits of gaining both cognitive skill and maturity and grit that together matter for achieving later life success.
While macroeconomists continue to debate what factors explain the wealth of nations, no doubt “human capital” accumulation (as often measured by investments in education and lifetime learning) is a crucial factor in explaining different people’s income within a nation and for explaining the growth of nations over time, such as the rise of South Korea’s economy.
Unlike investments in physical capital (such as buying a tractor or a computer), an investment in human capital is tied to that individual. If due to advances in population health, one’s life expectancy rises, then early investments in human capital become even more valuable to the individual and to society as a whole.
Once an adult has acquired a lifetime of skills and experience, how does aging affect one’s performance at work and in daily life? What do we know about human capital and age? In recent years, experts have started to better understand the relationship between human capital, cognition and age, which has important implications for an aging population.
What Is Cognitive Capacity?
Cognitive capacity can be broken down into two components: fluid intelligence and crystallized intelligence.
- Fluid intelligence (or IQ) measures the ability to reason and solve novel problems. On average, we see fluid intelligence increasing rapidly during childhood and adolescence, reaching a peak around age 20, and then decreasing at a steady rate for the rest of life.
- Crystallized intelligence embodies an individual’s knowledge, including work-related skills. This component tends to continue increasing throughout adult life and levels out during old age.
The precise biological mechanisms underlying the decline of fluid intelligence from early adulthood onward remain unresolved. But we know the two components of cognitive capacity complement each other and that education is strongly correlated with the level of cognitive function in old age.
Can We Slow the Effect of Aging?
Given that education is strongly correlated with the levels of cognitive function in old age and, as a society, we have become more educated in recent generations, there do seem to be some improvements in cognitive function. For example, studies of dementia have identified some decline in rates of dementia between cohorts 10 years apart (Hudomiet, et al., 2018; Langa, et al., 2017). In addition, the “Flynn Effect” has demonstrated cross-cohort increases in test scores on tests of fluid intelligence around the world during the past 50 years. A recent study from Sweden links this increase to a shift in education curricula toward problem solving and away from memorization.
Yet, it remains to be seen whether there is an upper limit to this effect or whether the plateauing of growth of educational attainment of men in recent cohorts will lead to a change in dementia incidence.
Societies Should Prioritize Lifelong Learning
A significant amount of academic literature demonstrates the positive correlation between health and education—which is separate from income.
Interestingly, policies in European countries that encouraged early retirement have been found to have a causal negative effect on average test scores compared to other countries, including the U.S., in which government policy has a relatively neutral impact on the length of working life (Rohwedder and Willis, 2010). My colleagues and I (Carr, et al., 2020) have also found that workers whose jobs were cognitively demanding were protected from declining test scores after retirement while workers in less cognitively demanding jobs had significantly declines in test scores following retirement.
While I am not arguing for changing retirement ages or incentivizing elongating careers, it is important to note the relationship between cognition and work. As a society, we should prioritize early childhood interventions and, more broadly, create opportunities for people to acquire education and continue using their brains throughout their lives, thereby creating cognitive reserve (Stern, 1999, 2002, 2017) that helps protect against abnormal cognitive decline in old age.
- Carr, Dawn C., Robert Willis, Ben Lennox Kail and Laura L. Carstensen (2020). “Alternative Retirement Paths and Cognitive Performance: Exploring the Role of Preretirement Job Complexity.” The Gerontologist, Volume 60, Issue 3, April 2020, 460–471.
- Hudomiet, Péter, Michael D Hurd and Susann Rohwedder (2018). The Journals of Gerontology: Series B, Volume 73, Issue suppl_1, S10–S19.
- Langa, Kenneth M., Eric B Larson and Eileen M. Crimmins (2017). “A comparison of the prevalence of dementia in the United States in 2000 and 2012.” JAMA Internal Medicine, 177(1):51-58.
- Langa, et al., 2017. “Dementia Prevalence in the United States in 2000 and 2012: Estimates Based on a Nationally Representative Study.”
- Rohwedder, Susann and Robert J. Willis (2010). “Mental Retirement.” Journal of Economic Perspectives, Volume 24, Number 1, 119–138.
- Stern, Yaakov (2017). “An approach to studying the neural correlates of reserve.” Brain Imaging and Behavior Journal of the International Neuropsychological Society (2002), 8, 448–460. 11:410–416.
- Stern, Yaakov (2002). “What is cognitive reserve? Theory and research application of the reserve concept.” Behavior Journal of the International Neuropsychological Society (2002), 448–460.
- Stern, Y., Albert, S., Tang, M.-X., & Tsai, W.-Y. (1999). “Rate of memory decline in AD is related to education and occupation: Cognitive reserve?” Neurology, 53, 1942–1947.