The Relationship between social leisure and life satisfaction: causality and policy implications

Social leisure is generally found to be positively correlated with life satisfaction in the empirical literature. We ask if this association captures a genuine causal effect by using panel data from the GSOEP. Our identification strategy exploits the change in social leisure brought about by retirement, since the latter is an event after which the time investable in (the outside job) relational life increases. We instrument social leisure with various measures of the age cohort specific probability of retirement. With such approach we document that social leisure has a positive and significant effect on life satisfaction. Our findings shed some light on the age-happiness pattern. Policy implications are also discussed.