Working Paper: NBER ID: w12935
Authors: David G. Blanchflower; Andrew Oswald
Abstract: Recent research has argued that psychological well-being is U-shaped through the life cycle. The difficulty with such a claim is that there are likely to be omitted cohort effects (earlier generations may have been born in, say, particularly good or bad times). Hence the apparent U may be an artifact. Using data on approximately 500,000 Americans and Europeans, this paper designs a test that makes it possible to allow for different birth-cohorts. A robust U-shape of happiness in age is found. Ceteris paribus, well-being reaches a minimum, on both sides of the Atlantic, in people's mid to late 40s. The paper also shows that in the United States the well-being of successive birth-cohorts has gradually fallen through time. In Europe, newer birth-cohorts are happier.
Keywords: wellbeing; happiness; life cycle; cohort effects
JEL Codes: I10; J00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| age (J14) | wellbeing (I31) |
| cohort effects (C92) | wellbeing (I31) |
| age + cohort dummies (J19) | wellbeing (I31) |
| birth cohorts (J11) | wellbeing (I31) |
| age (J14) | U-shape of wellbeing (I31) |
| cohort dummies (C24) | U-shape of wellbeing (I31) |