Does being smarter make you happier? Evidence from Europe

In this paper we study the importance of cognitive abilities for the subjective well-being of older individuals. We draw unique panel data from the Survey of Health, Ageing and Retirement in Europe (SHARE) on a representative sample of individuals aged 50+. The analysis reveals that individuals with higher cognitive abilities have, on average, higher levels of subjective well-being. The result holds for two different well-being measures and remains robust under different specifications and limitations on the data. As such, it provides some of the first empirical evidence on the relationship between cognition and subjective well-being of older individuals in Europe.