Does Life Satisfaction Vary with Time and Income? Investigating the Relationship Among Free Time, Income, and Life Satisfaction

Time and income are distinct and critical resources needed in the pursuit of happiness (life satisfaction). Income can be used to purchase market goods and services, and time can be used to spend time with friends and family, rest and sleep, and other activities. Yet little research has examined how different combinations of time and income affect life satisfaction, and if more of both is positively associated with greater levels of life satisfaction. We investigate whether life satisfaction significantly varies with time and income using data from the American Time Use Survey and its well-being module, which is a nationally representative sample of over 5000 US respondents over the age of 15. We plot a three-dimensional space exploring the relationship among time, income, and life satisfaction, finding people with similar incomes with less free time have lower levels of life satisfaction. We also identify different four subpopulations, three of which have low well-being along time and income, and one with high well-being along time and income. These subgroups significantly differ along key characteristics. Respondents with less free time and low income—the doubly poor—are more likely to be female, less educated, and have more than two kids and young children. Those with low income but lots of time, in comparison, are more likely to be black, unemployed, and have some physical or cognitive difficult. We conclude that time provides unique insights into human well-being that income alone cannot capture and should be further incorporated into research and policy on life satisfaction.