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Does Money Bring Happiness? Evidence from an Income Shock for Older People

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  • Cuong, Nguyen Viet

Abstract

There is wide consensus on a positive association between money and happiness. However, estimation of the causal effect of money on happiness is challenging because of the endogeneity bias. In this study, we use the receipt of social pensions as an external income shock to estimate the effect of income on life satisfaction of older people in Vietnam. Using age threshold for social pensions as an instrumental variable for income, we find that higher income helps older people feel more satisfied with their life and other people and also increase the likelihood of having sexual relations.

Suggested Citation

  • Cuong, Nguyen Viet, 2021. "Does Money Bring Happiness? Evidence from an Income Shock for Older People," Finance Research Letters, Elsevier, vol. 39(C).
    • Handle: RePEc:eee:finlet:v:39:y:2021:i:c:s1544612319304325
    DOI: 10.1016/j.frl.2020.101605
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    References listed on IDEAS

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    More about this item

    Keywords

    Life satisfaction; Happiness; Household income; Social pensions; Older people;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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