Does relative material wealth matter for child and adolescent life satisfaction?

•We test whether the relative wealth effects found in adulthood exist in childhood.•A positive relationship is found between material wealth and life satisfaction.•We find an inverse relationship between peer material wealth and life satisfaction.•When disaggregated by gender the relative wealth effect holds for boys only.•Relative wealth affects both adults and young males. There is a substantial literature examining the impact of relative wealth or income on adult subjective well-being. Yet the relationship between relative wealth and the subjective well-being of children and adolescents remains largely unknown. This study examines the role of relative (peer) wealth in determining youth life satisfaction. Examining this relationship in the young is advantageous as children and adolescents have limited influence on their socio-economic status. Using school fixed effects, peer groups defined at the school-grade level are likely to be partially exogenous as the student's grade is largely determined by year of birth. The results suggest that relative wealth is negatively associated with life satisfaction, though mainly for males.