# **4.1 Labor Market Status, Age, Income, Civic Status, Education and Health**

In all specifications, the coefficient for males is positive and significant (0.5 points higher than females). This indicates that men self-report higher levels of well-being than women. This is also visible in the raw mean, where men are 0.5 points happier than women. The effect of age is U-shaped, confirming the results found in the literature<sup>7</sup> , bottoming in the late thirties.

Consistent with most of the literature findings, the effect of marriage is slightly positive, while being separated, divorced or widowed is on average associated with a lower well-being. This should not be seen as a causal effect, as it could also be possible that being inherently happy favors one’s marriage prospects. To isolate the causal effect of marriage or divorce we need to look at transitions between civic states.<sup>8</sup> This is done in Clark and Lucas (2006). Using the GSOEP, they find that marriage increases happiness but that a habituation effect exists. The prospect of marriage (cohabitation) raises wellbeing 3 years before marriage, but this increase in happiness does not last longer than 3 years after the marriage date<sup>9</sup> . The channels through which marriage _causes_ the rise in well-being are explained in Argyle (2002). An intimate relationship enhances self-esteem and it can attenuate stress from other life activities like one’s job.

The effect of income on SWB is particularly interesting. As found in Easterlin (1974, 2001), income is a poor estimator of happiness. The results found in the literature suggest that relative income matters more than income itself, and income growth is important but not its level (above a certain threshold). These results highlight the role of comparisons, to others and to oneself in the past. The coefficients we find are negative and insignificant, confirming this story. However, when one goes from specification 2 to specification 3, the coefficient remains negative and becomes slightly significant. This suggests that a higher income might be associated with other variables that we are not controlling for (such as hours of work) that are negatively correlated with SWB. In the appendix a specification controlling for relative income is presented. Being in the top quarter of the wage distribution has no significant impact on well being. The effect of education is also interesting. The higher the achievement the lower the SWB. The current explanation is that a higher diploma leads also to higher income expectation, which reduces satisfaction for a given level of income. (see Argyle, 2002, and Frey and Stutzer, 2001, on expectations).

> 7See Clark and Oswald(1994), Blanchflower and Oswald (2007), Frey and Stutzer (2002), Winkelmann and Winkelmann (1998)

> 8Which gender benefits more from marriage has been subject to intense debate. Bernard (1972) proposed that men benefit much more from marriage than women. Glenn (1975) shows the opposite. More recent findings using subjective well-being data confirm Bernard (Fowers, 2004), while others show that marriage increases happiness equally between genders.

> 9Stutzer and Frey (2006), using the same data, find exactly the same results

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