Life gets miserable with age, but those with higher life satisfaction & in better health tend to live longer, & , among survivors, individuals with higher life satisfaction are more likely to remain in the survey, masking the decline

The age profile of life satisfaction after age 65 in the U.S. Péter Hudomiet, Michael D. Hurd, Susann Rohwedder. Journal of Economic Behavior & Organization, Volume 189, September 2021, Pages 431-442. https://doi.org/10.1016/j.jebo.2021.07.002

Highlights

• Older people express higher life satisfaction, the “Paradox of well-being.”

• But in longitudinal data life satisfaction declines with age after 65.

• Resolution of paradox: individuals with high life satisfaction stay in study longer.

• Population life satisfaction higher at older ages due to mortality & other selection.

• Life satisfaction of individuals declines due to health and widowing.

Abstract: Although income and wealth are frequently used as indicators of well-being, they are increasingly augmented with subjective measures such as life satisfaction to capture broader dimensions of the well-being of individuals. Based on large surveys of individuals, life satisfaction in cross-section often is found to increase with age beyond retirement into advanced old age. It may seem puzzling that average life satisfaction does not decline at older ages because older individuals are more likely to experience chronic or acute health conditions, or the loss of a spouse. Accordingly, this empirical pattern has been called the “paradox of well-being.” We examine the age profile of life satisfaction of the U.S. population age 65 or older in the Health and Retirement Study (HRS), and find that in cross-section it increases between age 65 and 71 and is flat thereafter; but based on the longitudinal dimension of the HRS, life satisfaction significantly declines with age and the rate of decline accelerates with age. We reconcile the cross-section and longitudinal measurements by showing that both differential mortality and differential non-response bias the cross-sectional age profile upward: individuals with higher life satisfaction and in better health tend to live longer, and, among survivors, individuals with higher life satisfaction are more likely to remain in the survey, masking the decline in life satisfaction experienced by individuals as they age. We conclude that the optimistic view about increasing life satisfaction at older ages based on cross-sectional data is not warranted.

Keywords: Subjective well-beingDifferential mortalityDifferential non-responseHealthWidowing