Researchers studied the extent to which almost 4,000 participants felt connected to certain groups, and then measured the impact this had upon their levels of happiness.
The study found that the more an individual identified with a particular group, the more happy they were with their life.
With each additional group that people connected with, their happiness increased by nine per cent, researchers found.
"Our findings suggest that thinking more about one's group life could have significant benefits for an overall sense of wellbeing," said Juliet Wakefield from Nottingham Trent University in the UK.
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Researchers believe that the effect could be the result of group identification providing individuals with a stronger sense of purpose and security, as well crucial social support during times of stress and crisis.
"We tend to identify with groups that share our values, interests and life priorities, as well as those that support us in times of crisis, and we can see how this would link to happiness," said Wakefield.
"It is that subjective sense of belonging that is crucial for happiness," she added.
Researchers found that the relationship between group identification and happiness remained even after they took into account participant gender, age, employment status, nationality and the extent of their contact with each group.
The findings were published in the Journal of Happiness Studies.