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Estimating the influence of life satisfaction and positive affect on later income using sibling fixed effects.

ABSTRACT: The question of whether there is a connection between income and psychological well-being is a long-studied issue across the social, psychological, and behavioral sciences. Much research has found that richer people tend to be happier. However, relatively little attention has been paid to whether happier individuals perform better financially in the first place. This possibility of reverse causality is arguably understudied. Using data from a large US representative panel, we show that adolescents and young adults who report higher life satisfaction or positive affect grow up to earn significantly higher levels of income later in life. We focus on earnings approximately one decade after the person's well-being is measured; we exploit the availability of sibling clusters to introduce family fixed effects; we account for the human capacity to imagine later socioeconomic outcomes and to anticipate the resulting feelings in current well-being. The study's results are robust to the inclusion of controls such as education, intelligence quotient, physical health, height, self-esteem, and later happiness. We consider how psychological well-being may influence income. Sobel-Goodman mediation tests reveal direct and indirect effects that carry the influence from happiness to income. Significant mediating pathways include a higher probability of obtaining a college degree, getting hired and promoted, having higher degrees of optimism and extraversion, and less neuroticism.

SUBMITTER: De Neve JE

PROVIDER: S-EPMC3523830 | biostudies-other | 2012 Dec

REPOSITORIES: biostudies-other

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Estimating the influence of life satisfaction and positive affect on later income using sibling fixed effects.

De Neve Jan-Emmanuel JE Oswald Andrew J AJ

Proceedings of the National Academy of Sciences of the United States of America 20121119 49

The question of whether there is a connection between income and psychological well-being is a long-studied issue across the social, psychological, and behavioral sciences. Much research has found that richer people tend to be happier. However, relatively little attention has been paid to whether happier individuals perform better financially in the first place. This possibility of reverse causality is arguably understudied. Using data from a large US representative panel, we show that adolescen ...[more]

PMID: 23169627

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Project description:ImportanceEvidence linking parental socioeconomic position and offspring's schizophrenia risk has been inconsistent, and how risk is associated with parental socioeconomic mobility has not been investigated.ObjectiveTo elucidate the association between parental income level and income mobility during childhood and subsequent schizophrenia risk.Design, setting, and participantsNational cohort study of all persons born in Denmark from January 1, 1980, to December 31, 2000, who were followed up from their 15th birthday until schizophrenia diagnosis, emigration, death, or December 31, 2016, whichever came first. Data analyses were from March 2018 to June 2019.ExposureParental income, measured at birth year and at child ages 5, 10, and 15 years.Main outcomes and measuresHazard ratios (HRs) for schizophrenia were estimated using Cox proportional hazard regression. Cumulative incidence values (absolute risks) were also calculated.ResultsThe cohort included 1 051 033 participants, of whom 51.3% were male. Of the cohort members, 7544 (4124 [54.7%] male) were diagnosed with schizophrenia during 11.6 million person-years of follow-up. There was an inverse association between parental income level and subsequent schizophrenia risk, with children from lower income families having especially elevated risk. Estimates were attenuated, but risk gradients remained after adjustment for urbanization, parental mental disorders, parental educational levels, and number of changes in child-parent separation status. A dose-response association was observed with increasing amount of time spent in low-income conditions being linked with higher schizophrenia risk. Regardless of parental income level at birth, upward income mobility was associated with lower schizophrenia risk compared with downward mobility. For example, children who were born and remained in the lowest income quintile at age 15 years had a 4.12 (95% CI, 3.71-4.58) elevated risk compared with the reference group, those who were born in and remained in the most affluent quintile, but even a rise from the lowest income quintile at birth to second lowest at age 15 years appeared to lessen the risk elevation (HR, 2.80; 95% CI, 2.46-3.17). On the contrary, for those born in the most affluent quintile, downward income mobility between birth and age 15 years was associated with increased risks of developing schizophrenia.Conclusions and relevanceThis study's findings suggest that parental income level and income mobility during childhood may be linked with schizophrenia risk. Although both causation and selection mechanisms could be involved, enabling upward income mobility could influence schizophrenia incidence at the population level.

Dataset Information

Estimating the influence of life satisfaction and positive affect on later income using sibling fixed effects.

Publications

Estimating the influence of life satisfaction and positive affect on later income using sibling fixed effects.

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