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Heterogeneity in the Relationship between Happiness and Age: Evidence from the German Socio-Economic Panel

  • Gregori Baetschmann
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    This paper studies the evolution of life satisfaction over the life course in Germany. It clarifies the causal interpretation of the econometric model by discussing the choice of control variables and the underidentification between age, cohort and time effects. The empirical part analyzes the distribution of life satisfaction over the life course at the aggregated, subgroup and individual level. To the findings: On average, life satisfaction is mildly decreasing up to age fifty-five followed by a hump shape with a maximum at seventy. The analysis at the lower levels suggests that people differ in their life satisfaction trends, whereas the hump shape after age fity-five is robust. No important differences between men and women are found. In contrast, education groups differ in their trends: highly educated people become happier over the life cycle, where life satisfaction decreases for less educated people.

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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.407853.de/diw_sp0472.pdf
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    Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 472.

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    Length: 32 p.
    Date of creation: 2012
    Date of revision:
    Handle: RePEc:diw:diwsop:diw_sp472
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    1. Blanchflower, David G. & Oswald, Andrew J., 2007. "Is Well-Being U-Shaped over the Life Cycle?," IZA Discussion Papers 3075, Institute for the Study of Labor (IZA).
    2. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    3. Bert G.M. Van Landeghem, 2008. "Human Well-Being over the Life Cycle: Longitudinal Evidence from a 20-Year Panel," LICOS Discussion Papers 21308, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    4. Gwozdz, Wencke & Sousa-Poza, Alfonso, 2009. "Ageing, Health and Life Satisfaction of the Oldest Old: An Analysis for Germany," IZA Discussion Papers 4053, Institute for the Study of Labor (IZA).
    5. Blanchflower, David G. & Oswald, Andrew J., 2009. "The U-Shape without Controls," The Warwick Economics Research Paper Series (TWERPS) 896, University of Warwick, Department of Economics.
    6. Landeghem Bert van, 2011. "A Test for the Convexity of Human Well-Being over the Life Cycle: Longitudinal Evidence from a 20-Year Panel," Research Memorandum 043, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    7. Clark, Andrew E. & Etilé, Fabrice & Postel-Vinay, Fabien & Senik, Claudia & Van der Straeten, Karine, 2004. "Heterogeneity in Reported Well-Being: Evidence from Twelve European Countries," IZA Discussion Papers 1339, Institute for the Study of Labor (IZA).
    8. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2007. "Lags and leads in life satisfaction: a test of the baseline hypothesis," LSE Research Online Documents on Economics 19656, London School of Economics and Political Science, LSE Library.
    9. Frijters, Paul & Beatton, Tony, 2012. "The mystery of the U-shaped relationship between happiness and age," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 525-542.
    10. Adrian Bruhin & Rainer Winkelmann, 2009. "Happiness functions with preference interdependence and heterogeneity: the case of altruism within the family," Journal of Population Economics, Springer, vol. 22(4), pages 1063-1080, October.
    11. Fischer, Justina AV, 2009. "Happiness and age cycles – return to start…," MPRA Paper 15249, University Library of Munich, Germany.
    12. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
    13. Clark, Andrew E., 2007. "Born To Be Mild? Cohort Effects Don’t (Fully) Explain Why Well-Being Is U-Shaped in Age," IZA Discussion Papers 3170, Institute for the Study of Labor (IZA).
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