Changes in the Production of Well-being upon Family Formation | Munich Center for the Economics of Aging - MEA
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Changes in the Production of Well-being upon Family Formation

Recently, the effect of fertility on parents' happiness has garnered much attention in scientific papers as well as in the media.

One stream of research has investigated how life satisfaction of mothers and fathers evolves around the time of family formation and in the first years thereafter. Most recent studies employing advanced methods have found a bell-shaped pattern with life satisfaction increasing in anticipation, peaking immediately after childbirth and adapting to the baseline level of satisfaction. This finding is well in line with the notion of hedonic adaptation in life satisfaction.

An alternative, or additional, explanation relates to possible time-varying costs and benefits of children. We conceptualize overall life satisfaction as a compound measure of utility that can be disaggregated into domain-specific components, or intermediate goals, like stimulus, comfort, status, behavioral confirmation, or affection. Intermediate goals are “produced”, involving time and other means and may be substituted in order to maximize overall well-being. This leads us to expect permanent (time) cost of parenthood that are offset by the utility derived from children.

Using data from 10 waves of the German Family Panel (pairfam) and employing distributed fixed-effects models, we estimate the time-varying total effect of family formation on parents' life satisfaction as well as the indirect effects operating via interrelated mediating mechanisms. These comprise measures on health, stress and fatigue, relationship quality, social and leisure activities, working hours and income, including compensations and allowances.

We find evidence for both, hedonic adaptation with respect to overall life satisfaction as well as endogenous shifts in the sources of well-being. In the short term, particularly women profit from becoming a mother. But they also face high (opportunity) costs – mainly as labour, leisure, social contacts, and the relationship to the partner become less satisfying upon motherhood. For fathers, this is less pronounced as their labour supply is hardly affected. In the long run, both partners adapt to their baseline levels of life satisfaction. However, they face a significant and permanent drop in well-being generated in the considered domains, indicating a permanent gain in utility from children.

The project is conducted in cooperation with Gerrit Bauer and Josef Brüderl (LMU Munich). It has been presented at several international conferences and is close to completion with the final data analysis done and a manuscript in preparation.

Contact Person(s)
Kneip-Thorsten

Dr. Thorsten Kneip

Presentations and Contributions
22.11.2016
Dr. Thorsten Kneip
Estimating the Effect of Children on Parents’ Well-being: Strengths and Weaknesses of an Instrumental Variable Approach
31.05.2017
Dr. Thorsten Kneip
Parenthood and Well-being: The Early Years
19.07.2017
Dr. Thorsten Kneip
Parenthood and Well-being: The Early Years
20.07.2017
Dr. Thorsten Kneip
Estimating the Causal Effect of Children on Parental Happiness