The relationship between age and subjective well-being: Estimating within and between effects simultaneously

Philipp Biermann, Jürgen Bitzer and Erkan Gören

The Journal of the Economics of Ageing, 2022, vol. 21, issue C

Abstract: In this paper, we employ a correlated random effects econometric framework to simultaneously estimate the within and between effects of age on subjective well-being based on longitudinal survey data from the German Socio-Economic Panel (SOEP). The proposed approach helps to explain differing findings on the relationship between age and subjective well-being reported in a series of studies based on cross-sectional and/or longitudinal panel data. We find empirical support for a wave-like pattern of subjective well-being over the life course. In contrast to the existing literature, our results point to significantly different life cycle patterns for the within- and between-person results. While the between-person results show robust turning points of age around the mid-40s and 90s, the within-person findings indicate that subjective well-being is rather stable between age 16 and 23 and then approaches a local maximum at age 75. We show that the type of variation employed in the empirical analysis (e.g., cross-sectional vs. longitudinal panel) of the age-well-being association has a non-negligible impact on the obtained results and the inferences drawn. Moreover, we do not find support of a U-shape association between subjective well-being and age. This finding holds even if we restrict the sample to those survey respondents aged 18–65 years, indicating that the age-well-being relationship is more complex than a U-shape would predict. A series of additional robustness tests corroborate our main findings.

Keywords: Subjective well-being; Life satisfaction; Life cycle happiness; Cohort effects; Mundlak approach; Correlated random effects; Between- and within-person effects (search for similar items in EconPapers)
JEL-codes: C21 C23 I31 J10 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Relationship between Age and Subjective Well-Being: Estimating Within and Between Effects Simultaneously (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecag:v:21:y:2022:i:c:s2212828x21000591

DOI: 10.1016/j.jeoa.2021.100366

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