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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 fifty-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.econ.uzh.ch/static/wp/econwp047.pdf
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    Paper provided by Department of Economics - University of Zurich in its series ECON - Working Papers with number 047.

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    Date of creation: Nov 2011
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    Handle: RePEc:zur:econwp:047
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    1. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
    2. Stevenson, Betsey & Wolfers, Justin, 2008. "Happiness Inequality in the United States," IZA Discussion Papers 3624, Institute for the Study of Labor (IZA).
    3. 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).
    4. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags and Leads in Life Satisfaction: A Test of the Baseline Hypothesis," SOEPpapers on Multidisciplinary Panel Data Research 84, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Fischer, Justina AV, 2009. "Happiness and age cycles – return to start…," MPRA Paper 15249, University Library of Munich, Germany.
    6. 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).
    7. Oliver Schilling, 2006. "Development of Life Satisfaction in Old Age: Another View on the "Paradox''," Social Indicators Research, Springer, vol. 75(2), pages 241-271, 01.
    8. Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
    9. David J. McKenzie, 2006. "Disentangling Age, Cohort and Time Effects in the Additive Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 473-495, 08.
    10. Kassenboehmer, Sonja C. & Haisken-DeNew, John P., 2012. "Heresy or enlightenment? The well-being age U-shape effect is flat," Economics Letters, Elsevier, vol. 117(1), pages 235-238.
    11. repec:hal:wpaper:hal-00242916 is not listed on IDEAS
    12. Andrew Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Senik & Karine Van Der Straeten, 2004. "Heterogeneity in reported well-being:Evidence from twelve European countries," PSE Working Papers hal-00242916, HAL.
    13. Adrian Bruhin & Rainer Winkelmann, 2007. "Happiness Functions with Preference Interdependence and Heterogeneity: The Case of Altruism within the Family," SOI - Working Papers 0702, Socioeconomic Institute - University of Zurich, revised Feb 2008.
    14. 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.
    15. David G. Blanchflower & Andrew Oswald, 2007. "Is Well-being U-Shaped over the Life Cycle?," NBER Working Papers 12935, National Bureau of Economic Research, Inc.
    16. Paul Frijters & Tony Beatton, 2008. "The mystery of the U-shaped relationship between happiness and age," NCER Working Paper Series 26, National Centre for Econometric Research.
    17. 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).
    18. 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.
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