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Unmet Aspirations as an Explanation for the Age U-shape in Human Wellbeing

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  • Schwandt, Hannes

    () (University of Zurich)

Abstract

A 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.

Suggested Citation

  • Schwandt, Hannes, 2013. "Unmet Aspirations as an Explanation for the Age U-shape in Human Wellbeing," IZA Discussion Papers 7604, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7604
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Happiness, age & class
      by chris dillow in Stumbling and Mumbling on 2014-03-01 20:27:31

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    Cited by:

    1. Terence C. Cheng & Nattavudh Powdthavee & Andrew J. Oswald, 2017. "Longitudinal Evidence for a Midlife Nadir in Human Well‐being: Results from Four Data Sets," Economic Journal, Royal Economic Society, vol. 127(599), pages 126-142, February.
    2. Marta Barazzetta, 2015. "The asymmetric effect of expectations on subjective well-being," Working Papers 374, ECINEQ, Society for the Study of Economic Inequality.
    3. Alan Piper, 2014. "Zukunftsangst! Fear of (and Hope for) the Future and Its Impact on Life Satisfaction," SOEPpapers on Multidisciplinary Panel Data Research 706, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Piper, Alan T., 2014. "Sliding down the U-shape? An investigation of the age-well-being relationship, with a focus on young adults," MPRA Paper 55819, University Library of Munich, Germany.
    5. Tufan Ekici & Selda Koydemir, 2016. "Income Expectations and Happiness: Evidence from British Panel Data," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 11(2), pages 539-552, June.
    6. Marco Bertoni & Luca Corazzini, 2015. "Life Satisfaction and Endogenous Aspirations," SOEPpapers on Multidisciplinary Panel Data Research 761, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Bell, Andrew, 2014. "Life-course and cohort trajectories of mental health in the UK, 1991–2008 – A multilevel age–period–cohort analysis," Social Science & Medicine, Elsevier, vol. 120(C), pages 21-30.
    8. Reto Odermatt & Alois Stutzer, 2015. "(Mis-)Predicted Subjective Well-Being Following Life Events," SOEPpapers on Multidisciplinary Panel Data Research 787, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    expectations; life satisfaction; aging;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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