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Income and the Happiness of Canadian 12 to 15 Year Olds P. Burton and S. Phipps Dalhousie University

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Associations between adult income and happiness much studied Little research on same question for children, yet might expect differences: Children have limited information about family finances Parents may shelter children Income less a measure of personal success Yet, children especially vulnerable to peer pressure and marketing? P. Burton and S. Phipps

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Use National Longitudinal Survey of Children and Youth to ask: 1. Is there a relationship between family income and child self-reported happiness? 2. Given family income, does relative socioeconomic status matter? 3. Are results the same for boys and girls? P. Burton and S. Phipps

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1. Brief discussion of literature 2. Data and Methods 3. Econometric results 4. Conclude P. Burton and S. Phipps

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Higher happiness with higher own income, especially in lower-income countries (e.g., Helliwell and Putnam, 2004) But, lower happiness with higher neighbours income (e.g., Barrington- Leigh and Helliwell, 2008; Luttmer, 2005) P. Burton and S. Phipps

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Little research on associations between income and happiness of children by economists P. Burton and S. Phipps

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1. Children can provide meaningful assessments of own well-being by age 8 2. Self assessments correlate well with, yet differ from other measures of mental health 3. Parent and child assessments correlate well 4. Child/youth reports of quality of life are predictive of future outcomes (Huebner, 2004) P. Burton and S. Phipps

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National Longitudinal Survey of Children and Youth (NLSCY), 1994-2004 Pool 3 4-year panels, with child 12 t o 15 in final year (1994-2000; 1996-2002; 1998- 2004) Children 12 to 15 self assess happiness (complete questionnaire privately) Mother provides other data used here Restrict to two-parent families (5,579 obs) P. Burton and S. Phipps

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In general, I am happy with how things are for me in my life now. Strongly Agree Agree Disagree Strongly Disagree P. Burton and S. Phipps

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Estimate ordered probit models; key explanatory variables are 4-cycle average family income and median neighbourhood income Neighbourhood income from 2001 census at forward sortation area level (1591 in Canada; Halifax has 27) P. Burton and S. Phipps

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Control variables use mother-reported information Also add control for mothers report that child was never unhappy 4 years earlier P. Burton and S. Phipps

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Child-related covariates: age (mean = 13.5); only child (22.2%); non-white (7.2%); chronic condition (29.8%) Parent or family context: mothers education (39.2% high school or less); immigrant parent (21.6%); religious attendance of parent, family move in last year; region, rural P. Burton and S. Phipps

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Family income has a positive relationship with self-reported young teen happiness Long-run average family income has larger and more precisely estimated relationship than current income Neighbourhood income has a negative relationship (nearly as large), especially for boys Robust to controlling mothers report on earlier child happiness P. Burton and S. Phipps

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Use estimated ordered probit coefficients to calculate probabilities Base is most representative Canadian teen, with all categorical variables equal to zero; continuous variables = sample mean Separate calculations for boys/girls using own coefficients but starting from same pooled boy/girl means P. Burton and S. Phipps

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1. Average income family in average income neighbourhood (Base) 2. 50% of average income family; average income neighbourhood 3. Neighbourhood income 50% of mean; average income family P. Burton and S. Phipps

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Young Teen Boys (%)Young Teen Girls (%) Strongly Disagree or Disagree AgreeStrongly Agree Strongly Disagree or Disagree AgreeStrongly Agree Av Family Income; Av Neighbourhood Income 5.254.140.86.356.337.4 50% Av Family Income; Av Neighbourhood Income 7.058.035.08.960.330.8 Av Family Income; 50% Av Neighbourhood Income 3.347.948.74.952.842.3

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Results for young teens are qualitatively similar to those available for adults (though not directly comparable) Self-assessed happiness increases with family income, but negative consumption externalities apparent (especially for teen boys) P. Burton and S. Phipps