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

Author

Listed:
  • Ifcher, John

    (Santa Clara University)

  • Zarghamee, Homa

    (Barnard College)

  • Cabacungan, Amanda

    (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).

Suggested Citation

  • Ifcher, John & Zarghamee, Homa & Cabacungan, Amanda, 2016. "The Great Recession and Life Satisfaction: The Unique Decline for Americans Approaching Retirement Age," IZA Discussion Papers 10452, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10452
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    subjective well-being; life satisfaction; Great Recession; wealth effect; retirement; and happiness;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D6 - Microeconomics - - Welfare Economics
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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