Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207345 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12519
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We examine how intergenerational mobility affects subjective wellbeing (SWB) using data from the British Cohort Study. Our SWB measures encapsulates both life satisfaction and mental health, and we consider both relative and absolute movements in income. We find that relative income mobility is a significant predictor of life satisfaction and mental health, whether people move upward or downward. For absolute income, mobility is only a consistent predictor of SWB and mental health outcomes if the person moves downwards, and in this case the impact is far larger than relative mobility. For both relative and income mobility downward movements affect SWB to a greater extent than upward movements, consistent with notions of loss aversion. Notably, we find that social class mobility does not affect SWB. We present evidence that the significant relative and absolute mobility effects we find operate partially through financial perceptions and consumption changes which can occur because of income mobility.
Subjects: 
income mobility
relative income
social class mobility
loss aversion
intergenerational mobility
life satisfaction
SWB
subjective wellbeing
mental health
JEL: 
D31
D63
I1
J60
Document Type: 
Working Paper

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