Do siblings make us happy?

In this paper we estimate the causal effect of having brothers as compared to having sisters on individuals' happiness in China. To identify the effect, we explore random gender assignment of siblings, conditional on the number of siblings, among urban residents born before the One Child Policy (1979). We find that having more brothers significantly increases individuals' happiness. Specifically, having one more brother rather than one sister increases one's self reported happiness by 0.023 on a 1 to 5 scale, which is equivalent to the effect of a 14% increase in the annual household income. The brothers effect is particularly large among low-income individuals and individuals with large income uncertainties. These results are consistent with findings in early literature, suggesting that brothers provide each other with financial support in case of need