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. SobelGoodman 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. subjective well-being | personal earnings

Individual Experience of Positive and Negative Growth is Asymmetric: Global Evidence from Subjective Well-Being Data

“…This semantic problem is widespread in the literature. For example, Kahneman and Deaton (2010) and De Neve and Oswald (2012) consider the relationship between personal income and subjective well-being, finding that earnings and happiness are to some extent predictive of each other. However, in both these papers the underlying data structure is not tested for whether the relationship is perhaps principally accounted for by the negative poles of the earnings and happiness spectrums.…”

“…Besides 'life satisfaction' there are other measures of subjective well-being that focus more on positive and negative affect and also meaningfulness (Dolan and Metcalfe, 2012). Although different measures of subjective well-being can relate differently to economic variables such as income (Kahneman and Deaton, 2010;De Neve and Oswald, 2012) and personal circumstances such as unemployment (Knabe et al, 2010), our analyses will employ the more evaluative measure-i.e. life satisfaction-in line with most other relevant work in the field.…”

A comprehensive study on the relationship between meaning and spirituality at work with job happiness, positive affect and job satisfaction

“…Among the most important functions of positive affect is that it will increase intend to conflict and confrontation with the environment, including the social environment and helps people continue to live actively, vigorously, capability (Hartel & Page, 2009). Job-related positive affect is also associated with higher levels of performance, effectiveness and more success (De Nevea, & Oswald, 2012). People with job-related positive affect who seek connection with others will enjoy it and enjoy the trust and satisfaction in their social interaction.…”

“…Positive affect also may be increased during regular physical activity, sleep pattern, having a friendly relationship and valuable goals (De Nevea, & Oswald, 2012). Among the most important functions of positive affect is that it will increase intend to conflict and confrontation with the environment, including the social environment and helps people continue to live actively, vigorously, capability (Hartel & Page, 2009).…”

“…Studies conducted in the field of affects have discussed both positive and negative affective dimensions that were obtained from conducted factor analyses on self-evaluation tools, a multidimensional scale of aspects of affective features and mood expressions scales (De Nevea, & Oswald, 2012). After discussing of two dimensions of positive and negative affect, the classification of two-dimensional affect by entering at the workplace, has been discussed as job-related positive affects (Barsade & Gibson, 2007;Gloria, Faulk & Steinhardt, 2013).…”