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Lags and Leads in Life Satisfaction : A Test of the Baseline Hypothesis

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Author Info
Andrew E. Clark
Ed Diener
Yannis Georgellis
Richard E. Lucas

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Abstract

We look for evidence of habituation in twenty waves of German panel data: do individuals, after life and labour market events, tend to return to some baseline level of well-being? Although the strongest life satisfaction effect is often at the time of the event, we find significant lag and lead effects. We cannot reject the hypothesis of complete adaptation to marriage, divorce, widowhood, birth of child, and layoff. However, there is little evidence of adaptation to unemployment for men. Men are somewhat more affected by labour market events (unemployment and layoffs) than are women, but in general the patterns of anticipation and adaptation are remarkably similar by sex.

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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers with number 84.

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Length: 25 p.
Date of creation: 2008
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Handle: RePEc:diw:diwsop:diw_sp84

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Keywords: Life satisfaction anticipation adaptation baseline satisfaction labour market and life events

Other versions of this item:

Find related papers by JEL classification:
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Loewenstein, George & Thaler, Richard H, 1989. "Intertemporal Choice," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 181-93, Fall. [Downloadable!] (restricted)
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  5. Andrew Clark & Yannis Georgellis & Peter Sanfey, 1999. "Scarring: The Psychological Impact of Past Unemployment," Studies in Economics 9903, Department of Economics, University of Kent. [Downloadable!]
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  6. Hendrik Jürges, 2007. "Unemployment, life satisfaction and retrospective error," Journal Of The Royal Statistical Society Series A, Royal Statistical Society, vol. 127(1), pages 43-61. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Claudia Senik, 2006. "Is man doomed to progress?," PSE Working Papers 2006-12, PSE (Ecole normale supérieure). [Downloadable!]
    Other versions:
  2. Lelkes, Orsolya, 2008. "Happiness over the life cycle: exploring age-specific preferences," MPRA Paper 7302, University Library of Munich, Germany. [Downloadable!]
  3. repec:ese:iserwp: is not listed on IDEAS
  4. Orsolya Lelkes, 2005. "Knowing what is good for you. Empirical analysis of personal preferences and the “objective good”," Others 0502008, EconWPA. [Downloadable!]
    Other versions:
  5. John Helliwell, 2005. "Well-Being, Social Capital and Public Policy: What's New?," NBER Working Papers 11807, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Stephan Meier & Alois Stutzer, . "Is Volunteering Rewarding in Itself?," IEW - Working Papers iewwp180, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  7. Andrew J. Oswald & Nattavudh Powdthavee, 2006. "Does Happiness Adapt? A Longitudinal Study of Disability with Implications for Economists and Judges," IZA Discussion Papers 2208, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Axel Börsch-Supan & Hendrik Jürges, 2007. "Early Retirement, Social Security and Well-Being in Germany," MEA discussion paper series 07134, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
    Other versions:
  9. Namkee Ahn & Juan Ramón García & Juan Francisco Jimeno, 2004. "The Impact of Unemployment on Individual Well-Being in the EU," Economics Working Papers 029, European Network of Economic Policy Research Institutes. [Downloadable!]
  10. Krueger, Alan B. & Mueller, Andreas, 2008. "The Lot of the Unemployed: A Time Use Perspective," IZA Discussion Papers 3490, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Tania Burchardt, 2004. "One mans rags are another mans riches: Identifying adaptive preferences using panel data," CASE Papers 086, Centre for Analysis of Social Exclusion, LSE. [Downloadable!]
  12. Gardner, Jonathan & Oswald, Andrew J., 2006. "Money and Mental Wellbeing : A Longitudinal Study of Medium-Sized Lottery Wins," The Warwick Economics Research Paper Series (TWERPS) 754, University of Warwick, Department of Economics. [Downloadable!]
    Other versions:
  13. Jonathan Gardner & Andrew J. Oswald, 2005. "Do Divorcing Couples Become Happier By Breaking Up?," IZA Discussion Papers 1788, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  14. Liam Graham & Andrew J. Oswald, 2006. "Hedonic Capital," IZA Discussion Papers 2079, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  15. Namkee Ahn & Juan Ramón García & Juan F. Jimeno, . "Well-being Consequences of Unemployment in Europe," Working Papers 2004-11, FEDEA. [Downloadable!]
  16. Jan M. Hoem & Michaela Kreyenfeld, 2006. "Anticipatory analysis and its alternatives in life-course research," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 15(17), pages 485-498, November. [Downloadable!]
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