The research appears in Melbourne Institute's Working Paper Series.
Participants were asked to read words aloud, to recite lists of numbers running backwards and to link letters and numbers in a particular pattern while being timed.
Those who worked about 25 hours per week tended to achieve the best scores. Those who did not work at all scored about 18 percent lower on the reading test, 20 percent lower on the backwards numbers and 15 percent lower on matching numbers and letters. Participants who worked 55 hours or more scored lower than participants who didn't work at all.
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"Work can be a double-edged sword, in that it can stimulate brain activity, but at the same time, long working hours and certain types of tasks can cause fatigue and stress which potentially damage cognitive functions," the report said.
Colin McKenzie, an economics professor who took part in the research, told the BBC, it would appear that working extremely long hours was more damaging on brain function than not working at all.