The mystery of the U-shaped relationship between happiness and age

Abstract

a b s t r a c tIn this paper, we address the puzzle of the relationship between age and happiness. Whilst the majority of psychologists have concluded there is not much of a relationship at all, the economic literature has unearthed a possible U-shape relationship with the minimum level of satisfaction occurring in middle age (35-50). In this paper, we look for a U-shape in three panel data sets, the German Socioeconomic Panel (GSOEP), the British Household Panel Survey (BHPS) and the Household Income Labour Dynamics Australia (HILDA). We find that the raw data mainly supports a wave-like shape that only weakly looks U-shaped for the 20-60 age range. That weak U-shape in middle age becomes more pronounced when allowing for socio-economic variables. When we then take account of selection effects via fixed-effects, however, the dominant age-effect in all three panels is a strong happiness increase around the age of 60 followed by a major decline after 75, with the U-shape in middle age disappearing such that there is almost no change in happiness between the age of 20 and 50.

Your spouse is fired! How much do you care?

“…Likewise, home ownership-which is a proxy for wealth-and household income are positively associated with spousal life satisfaction. Like other studies using the GSOEP (Frijters and Beatton 2012;Kassenboehmer and Haisken-DeNew 2012), we fail to document a U-shaped relationship between life satisfaction and age in fixed effects estimations (see Ulloa et al 2013 for a review). Finally, disability status and the annual doctor visits-both of which are proxies for health status-are negatively associated with life satisfaction.…”

How Does Subjective Well-Being Evolve with Age? A Literature Review

“…However, in general, one must stress that the functional relationships identified in the empirical studies are prima facie incompatible. In a recent study, Frijters and Beatton (2012) shed some light on this issue by analysing different functional forms with data from three large panel data sets from Germany, Australia and Britain (namely with data from the GSOEP, HILDA and BHPS). The study shows that the age-happiness profile is U-shaped when including socio-22 economic control variables, but that this relationship disappears when using fixedeffects methods that also control for unobserved individual characteristics, a result also observed in Gwozdz and Sousa-Poza (2010) and Kassenboehmer and HaiskenDeNew (2012).…”

Life-course and cohort trajectories of mental health in the UK, 1991–2008 – A multilevel age–period–cohort analysis

“…Some attempt to control for both periods and cohorts (Blanchflower & Oswald, 2008;Clark & Oswald, 2006), some control only for periods (Blanchflower & Oswald, 2009;Howden-Chapman et al, 2011) whilst others are cross-sectional analyses that cannot control for cohorts due to exact collinearity with age (Blanchflower & Oswald, 2011;Deaton, 2008;Lang et al, 2011). Papers finding no U-shape (Frijters & Beatton, 2012;Kassenboehmer & Haisken-DeNew, 2012) tend to be fixed effects analyses, controlling for all individual level variability using dummies or demeaning (Bell & Jones, 2014d). Because cohort is an unchanging attribute of individuals, this controls for cohort effects (unless periods are additionally controlled).…”