The Relationship Between Age and Happiness Varies by Income

The link between age and happiness has been the subject of numerous studies. It is still a matter of controversy whether the relationship is U-shaped, with happiness declining after youth before bouncing back in old age, or not. While the effect of age has been examined conditional on income and other socio-demographic variables, so far, the interactions between age and income have remained insufficiently explored. Using data from the European Social Survey, this article shows that the nature of the relationship between age and happiness varies strongly with different levels of relative income. People in the lowest decile of the income distribution experience a 'hockey stick': a deep decline in self-reported happiness until around age 50-55 and a small bounce back in old age. The classic U-curve is found mostly in the middle-income ranks. For people at the top of the income distribution, average happiness does not vary much with age. These results demonstrate the important role of income in moderating the relationship between age and happiness.