Are we architects of our own happiness? The importance of family background for well-being

Abstract

This paper analyzes whether individuals have equal opportunity to achieve happiness (or well-being). Using data from the German Socio-Economic Panel Study (SOEP), we estimate sibling correlations and intergenerational correlations in four self-reported measures of well-being: life satisfaction, satisfaction with household income, job satisfaction, and satisfaction with health. We find high sibling correlations for all measures of well-being and therefore substantial influence of family background. The results suggests that family background explains, on average, between 30% and 60% of the inequality in well-being. The influence is smaller when the siblings’ psychological and geographical distance from their parental home is larger. Results from intergenerational correlations suggest that parental characteristics are considerably less important than family and community factors.