Retirement and the Marginal Utility of Income

Andrew Clark and Yarine Fawaz

Working Papers from HAL

Abstract: The individual level of subjective well-being (SWB) has been shown to predict a number of future observable outcomes. Behaviour may however also be affected by the slope of SWB with respect to certain variables. We here use latentclass analysis to model both intercept and slope heterogeneity in the SWB-income relationship, and construct a continuous measure of the marginal utility of income. We show this marginal utility does predict future behaviour: those who value income more (who have a higher income elasticity of well-being) are less likely to retire. This correlation is found conditional on both the level of income and the level of well-being.

Keywords: Subjective Well-being; Retirement; Marginal Utility of Income; Latent Class Models (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-age, nep-ltv and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01189009v1
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Working Paper: Retirement and the Marginal Utility of Income (2015)
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