The Great Recession and Life Satisfaction: The Unique Decline for Americans Approaching Retirement Age

24 Pages Posted: 10 Jan 2017

See all articles by John Ifcher

John Ifcher

Santa Clara University - Leavey School of Business - Economics Department

Homa Zarghamee

Santa Clara University - Leavey School of Business

Amanda Cabacungan

Santa Clara University

Abstract

Using data from the U.S. Centers for Disease Control and Prevention's Behavioral Risk Factor Surveillance System, we examine the impact of the Great Recession on subjective well-being (as measured by life satisfaction) and attempt to identify disparate effects by age. We find that those approaching retirement age (aged 55 to 64) experienced reduced life-satisfaction after the recession, whereas younger working-aged adults did not. The disparate effects by age cannot be explained by income or unemployment trends, but may be explained by wealth effects. For example, we find that the life satisfaction of those approaching retirement age, but not of younger working-age adults, is closely correlated with wealth indices (e.g., the Case-Shiller Housing Price Index and the S&P 500 Index).

Keywords: subjective well-being, life satisfaction, Great Recession, wealth effect, retirement, and happiness

JEL Classification: G01, D14, D91, D6, I31

Suggested Citation

Ifcher, John and Zarghamee, Homa and Cabacungan, Amanda, The Great Recession and Life Satisfaction: The Unique Decline for Americans Approaching Retirement Age. IZA Discussion Paper No. 10452. Available at SSRN: https://ssrn.com/abstract=2895300

John Ifcher (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Homa Zarghamee

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Amanda Cabacungan

Santa Clara University

500 El Camino Real
Santa Clara, CA 95053
United States

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