Unmet Aspirations as an Explanation for the Age U-shape in Human Wellbeing
AbstractA large literature in behavioral and social sciences has found that human wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find people to err systematically in predicting their life satisfaction over the life cycle. They expect – incorrectly – increases in young adulthood and decreases during old age. These errors are large, ranging from 9.8% at age 21 to -4.5% at age 68, they are stable over time and observed across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7604.
Length: 34 pages
Date of creation: Aug 2013
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Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-09-24 (Economics of Ageing)
- NEP-ALL-2013-09-24 (All new papers)
- NEP-DEM-2013-09-24 (Demographic Economics)
- NEP-HAP-2013-09-24 (Economics of Happiness)
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