RAW files are typically 12, 14, or more bits. If yours are 8 bits you may want to review your workflow something is amiss.
At the risk of inciting the small but vocal 'eloquent-yet-misinformed' group in this forum, the short answer is yes, generally speaking it is better to begin retouching/finishing with the maximum information in the file, which would be the 16 bit option in PS.
In crude terms, the path from capture to print, etc., is a reductive one from the standpoint of image data, it makes sense to discard information only by choice, or when necessary. Given this, starting with the most information possible for any given file is a good strategy.
Though the higher bit rate is often considered to be unseen due to some monitor, or printer, or visual judgment limitations, one of the practical reasons why we work with files in this fashion is because it will handle more manipulation in PS without suffering deterioration as can be seen at lower bit rates.
In my work we see this all the time when we shoot D3X and Phase P65+ side by side on assignments, the D3X as great as it is, will start to show 'cracks' while the Phase will not.
Hope this helps you