The persistence of unhappiness: trapped into despair?

Abstract

This article investigates whether self-assessed states of unhappiness are persistent. To disentangle state dependence from unobserved heterogeneity in life satisfaction, it estimates a dynamic ordered Logit with correlated random effects on longitudinal data in France, the UK, Australia, and Germany. The persistence of life satisfaction is found to be heterogeneous; people already happy with their lives tend to remain happy while unhappiness sounds more transitory. Overall, there is no empirical evidence of unhappiness traps: rather, every individual faces the risk of experiencing some temporary spell of low subjective well-being in her life course.