Well-Being over the Life Span: Semiparametric Evidence from British and German Longitudinal Data

41 Pages Posted: 15 May 2009 Last revised: 27 Aug 2009

See all articles by Christoph Wunder

Christoph Wunder

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics; University of Bamberg

Andrea Wiencierz

Ludwig Maximilian University of Munich

Johannes Schwarze

University of Bamberg; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Helmut Kuechenhoff

Ludwig Maximilian University of Munich

Sara Kleyer

Ludwig Maximilian University of Munich

Philipp Bleninger

Ludwig Maximilian University of Munich

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2009

Abstract

This paper applies semiparametric regression models using penalized splines to investigate the profile of well-being over the life span. Splines have the advantage that they do not require a priori assumptions about the form of the curve. Using data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel Study (SOEP), the analysis shows a common, quite similar, age-specific pattern of life satisfaction for both Britain and Germany that can be characterized by three age stages. In the first stage, life satisfaction declines until approximately the fifth life decade. In the second age stage, well-being clearly increases and has a second turning point (maximum) after which well-being decreases in the third age stage. Several reasons for the three-phase pattern are discussed. We point to the fact that neither polynomial functions of the third nor the fourth degree describe the relationship adequately: polynomials locate the minimum and the maximum imprecisely. In addition, our analysis discusses the indistinguishability of age, period, and cohort effects: we propose estimating age-period models that control for cohort effects including substantive variables, such as the life expectancy of the birth cohort, and further observed socioeconomic characteristics in the regression.

Keywords: subjective well-being, life satisfaction, semiparametric regression, penalized splines, age-period model, age-cohort model

JEL Classification: C14, C23, D10, I31

Suggested Citation

Wunder, Christoph and Wiencierz, Andrea and Schwarze, Johannes and Kuechenhoff, Helmut and Kleyer, Sara and Bleninger, Philipp, Well-Being over the Life Span: Semiparametric Evidence from British and German Longitudinal Data (May 1, 2009). SOEPpaper No. 179; DIW Berlin Discussion Paper No. 889. Available at SSRN: https://ssrn.com/abstract=1403203 or http://dx.doi.org/10.2139/ssrn.1403203

Christoph Wunder (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

University of Bamberg ( email )

Feldkirchenstr. 21
Bamberg 96045
Germany

Andrea Wiencierz

Ludwig Maximilian University of Munich

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

Johannes Schwarze

University of Bamberg ( email )

Kirschaeckerstrasse 39
Bamberg 96045
Germany
+49 951 863 2600 (Phone)
+49 951 863 5569 (Fax)

German Institute for Economic Research (DIW Berlin)

Mohrenstraße 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Helmut Kuechenhoff

Ludwig Maximilian University of Munich ( email )

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

Sara Kleyer

Ludwig Maximilian University of Munich

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

Philipp Bleninger

Ludwig Maximilian University of Munich ( email )

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

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