Unmet Aspirations as an Explanation for the Age U-shape in Wellbeing

Hannes Schwandt

VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association

Abstract: An emerging economic literature has found evidence that wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find that future life satisfaction is strongly overestimated when young and underestimated during old age. This pattern is stable over time and observed within cohorts as well as across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing.

JEL-codes: D84 I30 J10 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-age, nep-hap and nep-neu
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Citations: View citations in EconPapers (8)

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Journal Article: Unmet aspirations as an explanation for the age U-shape in wellbeing (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc14:100360

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