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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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  • Dolan, Paul
  • Lordan, Grace

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

  • Dolan, Paul & Lordan, Grace, 2020. "Climbing up ladders and sliding down snakes: an empirical assessment of the effect of social mobility on subjective wellbeing," LSE Research Online Documents on Economics 104059, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:104059
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    More about this item

    Keywords

    income mobility; life satisfaction; mental health; social class mobility; subjective wellbeing;
    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
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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