Template-type: ReDif-Paper 1.0
Author-Name: Landeghem Bert van
Author-workplace-name: METEOR
Title: A Test for the Convexity of Human Well-Being over the Life Cycle: Longitudinal Evidence from a 20-Year Panel
Abstract: A huge cross-section literature, written by economists and others, argues that human well-being isU-shaped through the life cycle. In many cases this U-shape is robust (with as a well-knownexception the pattern evident in some U.S. data sets if few independent variables are included).However, a lively debate is currently ongoing about its true shape. This paper discusses the identication problem of age, time, and cohort eects. It suggests a simple way to interpretestimates of age variables in a rst-dierence framework. Building on McKenzie''s (2006) methodology,the paper shows that no extra assumptions are needed in order to identify the second derivative ofwell-being to age, i.e. to estimate the changes in changes in the actual age and well-beingrelationship. An empirical application, using a large German data set, nds that human well-beingis convex in age until after midlife, which is approximately consistent with a U-shaped patternthrough life, and not with the concave relationship sometimes found in U.S. studies.
Keywords: labour economics ; 
Series: Research Memoranda
Creation-Date: 2011
Number: 043
File-URL: http://arnop.unimaas.nl/show.cgi?fid=23322
File-Format: application/pdf
File-Size: 555096
Handle: RePEc:unm:umamet:2011043