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In this paper we investigate how age affects the self-reported level of life satisfaction among the elderly in Europe. By using a vignette approach, we find evidence that age influences life satisfaction through two counterbalancing channels. On the one hand, controlling for the effects of all other variables, the own perceived level of life satisfaction increases with age. On the other hand, given the same true level of life satisfaction, older respondents are more likely to rank themselves as "dissatisfied" with their life than younger individuals. Detrimental health conditions and physical limitations play a crucial role in explaining scale biases in the reporting style of older individuals.

Descriptive evidence shows that there is large cross-country variation in self-reported work disability rates of the elderly in Europe. In this paper we analyse whether these differences are genuine or they just reflect heterogeneity in reporting styles. To shed light on the determinants of work-disability differentials across countries, we combine a wide set of individuals' socioeconomic and health status characteristics with macro-economic indicators describing the institutional background of the country of residence.