English: How do common life events affect happiness?

Do people tend to adapt to common life events by converging back to a baseline level of happiness?

Clark et al. (2008)12 use data from the German Socio-Economic Panel to identify groups of people experiencing significant life and labor market events and trace how these events affect the evolution of their life satisfaction. The visualization here shows an overview of their main findings. In each individual chart, the red lines mark the estimated effect of a different event at a given point in time (with ‘whiskers’ marking the range of confidence of each estimate).

In all cases, the results are split by gender, and time is labeled so that 0 marks the point when the corresponding event took place (with negative and positive values denoting years before and after the event). All estimates control for individual characteristics, so the figures show the effect of the event after controlling for other factors (e.g., income, etc.).

The first point to note is that most events denote the evolution of a latent situation: People grow unhappy in the period leading up to a divorce, while they grow happy in the period leading up to a marriage.

The second point is that single life events do tend to affect happiness in the short run, but people often adapt to changes. Of course, there are clear differences in the extent to which people adapt. In the case of divorce, life satisfaction first drops, then goes up and stays high. For unemployment, there is a negative shock both in the short and long run, notably among men. And for marriage, life satisfaction builds up before the wedding and fades out after it.

In general, the evidence suggests that adaptation is an important feature of well-being. Many common but important life events have a modest, long-term impact on self-reported happiness. Yet adaptation to some events, such as long-term unemployment, is neither perfect nor immediate.