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The Relationship between Age and Subjective Well-Being: Estimating Within and Between Effects Simultaneously

Author

Listed:
  • Philipp Biermann

    (Otto von Guericke University Magdeburg)

  • Juergen Bitzer

    (University of Oldenburg, Department of Economics)

  • Erkan Goeren

    (University of Oldenburg, Department of Economics)

Abstract

Based on data from the German Socio-Economic Panel (SOEP), we used a correlated random effects econometric framework to simultaneously estimate the within and between effects of age on subjective well-being. The proposed approach overcomes the ambiguity in the relationship between age and subjective well-being reported in a series of studies based on cross-sectional and/or longitudinal panel data. Our results suggest that a cubic-type functional relationship between well-being and age fits the data best, leading to highly significant coefficient estimates associated with the age variables, and consistent within and between effects of age on subjective well-being. A linear or quadratic functional relationship between well-being and age is not empirically supported, as the between and within estimates of age on well-being differ significantly from each other. The main findings are robust to the inclusion of a broad range of individual-level sociological, demographic, and economic controls, and to the inclusion of various interviewer controls such as survey experience, survey type, and interviewer fixed effects.

Suggested Citation

  • Philipp Biermann & Juergen Bitzer & Erkan Goeren, 2019. "The Relationship between Age and Subjective Well-Being: Estimating Within and Between Effects Simultaneously," Working Papers V-421-19, University of Oldenburg, Department of Economics, revised Mar 2019.
  • Handle: RePEc:old:dpaper:421
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    More about this item

    Keywords

    Subjective Well-Being; Life Cycle Happiness; Cohort Effects; Mundlak Approach; Correlated Random Effects; Fixed Effects; Between- and Within-Person Effects;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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