Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89907
Authors: 
Schwandt, Hannes
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7604
Abstract: 
A large literature in behavioral and social sciences has found that human wellbeing follows a U-shape over age. Some theories have assumed that the U-shape is caused by unmet expectations that are felt painfully in midlife but beneficially abandoned and experienced with less regret during old age. In a unique panel of 132,609 life satisfaction expectations matched to subsequent realizations, I find people to err systematically in predicting their life satisfaction over the life cycle. They expect – incorrectly – increases in young adulthood and decreases during old age. These errors are large, ranging from 9.8% at age 21 to -4.5% at age 68, they are stable over time and observed across socio-economic groups. These findings support theories that unmet expectations drive the age U-shape in wellbeing.
Subjects: 
life satisfaction
expectations
aging
JEL: 
A12
I30
D84
Document Type: 
Working Paper

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