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

41 Pages Posted: 30 Aug 2018 Last revised: 2 Mar 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: February 28, 2019

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 multiple implications
for policy and financial advice that traditionally target individuals based on chronological age.
That is, for example, allowing more individual flexibility with respect to retirement decisions
as well as adapting financial products and services to match 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 and Economic Behaviors (February 28, 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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