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

41 Pages Posted: 30 Aug 2018

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: August 22, 2018

Abstract

Building on recent findings in psychology, we study the impact of subjective age (feeling younger or older than one’s chronological age) on economic behaviors. Using data from the Health and Retirement Study we find that subjective age predicts economic behaviors: Individuals with younger age identities 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 Behavior (choosing (avoiding) “young” (“old”) behaviors). Our results have implications for age-dependent policies that traditionally target individuals based on chronological age.

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 and Economic Behaviors (August 22, 2018). 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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