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

Publication type

Journal Article


Publication date

May 15, 2012


In 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

Published in

Journal of Economic Behavior and Organization

Volume and page numbers

Volume: 82 , p.525 -542






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