Intergenerational mobility and subjective well-being-Evidence from the general social survey

We investigate the relationship between intergenerational socio-economic mobility and subjective well-being (SWB) using data from the General Social Survey (GSS). We look at three different measures of intergenerational mobility-social, educational, and income mobility. We find that downward mobility with respect to all three measures has a negative effect on the self-reported level of happiness and subjective health while upward mobility is associated with positive outcomes in subjective well-being. The positive and negative effect of social and educational mobility, however, is entirely through the income and health channels while income mobility has an impact on subjective well-being even after controlling for the current level of income and health. We further find that the effect of income mobility on subjective well-being peaks between the ages of 35-45 years and then slowly dissipates. Finally, the negative effect of downward mobility on subjective well-being is much stronger than the positive effect of upward mobility. This is consistent with the decision theory of loss aversion according to which the experienced disutility from loses outweighs the utility from acquiring proportionate gains. We do not find evidence for loss aversion when it comes to social and educational mobility.