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Abstract:

cover
CEP Discussion Paper
Moving Up and Sliding Down: An Empirical Assessment of the Effect of Social Mobility on Subjective Wellbeing
Paul Dolan and Grace Lordan February 2013
Paper No' CEPDP1190:
Full Paper (pdf)

JEL Classification: D31; D63; I1; I14; J60


Tags: income mobility; social mobility; inter-generational; life satisfaction; swb; subjective wellbeing; mental health

Many people remain in the same income group as their parents and this is a cause of much discussion and some concern. In this work, we examine how intergenerational mobility affects subjective wellbeing (SWB) using the British Cohort Study. Our SWB measures encapsulate life satisfaction and mental health. We find that relative income mobility is a significant predictor of life satisfaction and mental health whether people move upward or downward. For absolute income, mobility is only a predictor of SWB and mental health outcomes if the person moves downward. We also explore pathways through which income mobility can impact on these outcomes. In particular, we present evidence that suggests much of the effect of income mobility on SWB is due to changes in the perception of financial security. But those who slide down are still less satisfied with their lives over and above any effect of financial insecurity. Overall, there is an asymmetric effect of income mobility: the losses of sliding on down are larger than the gains of moving up.