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Climbing up ladders and sliding down snakes: an empirical assessment of the effect of social mobility on subjective wellbeing

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  • Paul Dolan

    (London School of Economics)

  • Grace Lordan

    (London School of Economics)

Abstract

We examine how intergenerational mobility impacts on subjective wellbeing (SWB) drawing on data from the British Cohort Study. Our SWB measures encapsulate both life satisfaction and mental health, and we consider both relative and absolute movements in income. We find that relative income mobility is a significant predictor of life satisfaction and mental health, whether people move upward or downward. For absolute income, mobility is only a consistent predictor of SWB and mental health outcomes if the person moves downwards, and in this case the impact is far larger than relative mobility. For both relative and income mobility, downward movements impact SWB to a greater extent than upward movements, consistent with exhibiting loss aversion. Notably, we find that social class mobility does not affect SWB. We present evidence that the significant relative and absolute mobility effects we find operate partially through financial perceptions and consumption changes which can occur because of income mobility.

Suggested Citation

  • Paul Dolan & Grace Lordan, 2021. "Climbing up ladders and sliding down snakes: an empirical assessment of the effect of social mobility on subjective wellbeing," Review of Economics of the Household, Springer, vol. 19(4), pages 1023-1045, December.
  • Handle: RePEc:kap:reveho:v:19:y:2021:i:4:d:10.1007_s11150-020-09487-x
    DOI: 10.1007/s11150-020-09487-x
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    Cited by:

    1. Clark, Andrew E. & Cotofan, Maria, 2023. "Are the Upwardly-Mobile More Left-Wing?," IZA Discussion Papers 16290, Institute of Labor Economics (IZA).
    2. Olivier Bargain & Maria Lo Bue & Francesco Palmisano, 2022. "Dynastic Measures of Intergenerational Mobility," Working Papers hal-03896551, HAL.
    3. Lijie Song, 2022. "Examining the Relationship Between Intergenerational Upward Mobility and Inequality: Evidence from Panel Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(1), pages 1-27, August.
    4. Daniela Federici & Valentino Parisi & Francesco Ferrante, 2023. "Aspiration bias and job satisfaction of young Italian graduates," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 643-677, July.
    5. Shanshan Liu & Feng Yu & Cheng Yan, 2023. "The Impact of Higher Education Expansion on Subjective Well-Being during the COVID-19 Pandemic: Evidence from Chinese Social Survey," Sustainability, MDPI, vol. 15(7), pages 1-20, March.

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    More about this item

    Keywords

    Income mobility; Social class mobility; Life satisfaction; Subjective wellbeing; Mental health;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I1 - Health, Education, and Welfare - - Health
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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