What Age Do You Feel? - Subjective Age Identity and Economic Behaviors

43 Pages Posted: 30 Aug 2018 Last revised: 14 Jul 2019

See all articles by Zihan Ye

Zihan Ye

Zhejiang University - College of Economics

Thomas Post

Maastricht University - School of Business and Economics - Department of Finance; Netspar

Date Written: July 13, 2019

Abstract

Building on recent findings in psychology, we study the impact of subjective age identity (feeling younger or older than one’s chronological age) on economic behaviors. Using data from the Health and Retirement Study we find: Individuals with a younger age identity have higher work engagement, and their savings profile, as a function of the subjective age gap, is hump-shaped. The effects are economically significant, for example, increasing the subjective age gap by one standard deviation increases an individual’s likelihood to be employed in a subsequent HRS wave by 1.1% (about 21% of the conditional mean). The relationships found are consistent with an interplay of two subjective age channels: Ability (self-perceived abilities to perform certain economic behaviors) and Preference (choosing (avoiding) “young” (“old”) behaviors). Our results have implications for policy and financial advice that traditionally target individuals based on chronological age. That is, for example, allowing more flexibility with respect to retirement decisions as well as aligning financial products and services with subjective age identities.

Keywords: Subjective Age, Economic Behaviors, Employment Decision, Saving, Portfolio Choice

JEL Classification: D12, D14, D91, J20

Suggested Citation

Ye, Zihan and Post, Thomas, What Age Do You Feel? - Subjective Age Identity and Economic Behaviors (July 13, 2019). Available at SSRN: https://ssrn.com/abstract=3236603 or http://dx.doi.org/10.2139/ssrn.3236603

Zihan Ye

Zhejiang University - College of Economics ( email )

Yuquan Campus 38 Zheda Road
Hangzhou, Zhejiang 310027
China

Thomas Post (Contact Author)

Maastricht University - School of Business and Economics - Department of Finance ( email )

Tongersestraat 53
Maastricht, 6200 MD
Netherlands
+31 43 38 83899 (Phone)
+31 43 38 84875 (Fax)

HOME PAGE: http://www.thomas-post.com

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.netspar.nl

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