A good sense of humor has long been recognized as a powerful interpersonal skill. It is often referred to as a "social lubricant," serving to make social interaction easier and more enjoyable. Children, as well as adults, benefit from learning to use humor in social settings.
Children who initiate humor more often than their peers have been found to show more social participation in activities, and to be judged by their peers as being more sociable from the preschool level through junior high school (as well as throughout adulthood). This increased level of engagement in social activities further supports the development of other social skills, and increases the chances that these children will become social leaders.
Children who know how to use humor in social interaction are also better at putting others at ease. This creates an environment in which all communication is easier. The joy, laughter and cheerful demeanor of the child with good humor skills provide a ready invitation to others to join in.
It's difficult not to like someone who makes you laugh. So children who become more skilled at initiating humor in social interaction (the skill increases simply by doing it more often) should be more popular and find it easier to develop new friendships. Research has shown this to be true for children, adolescents and adults. Children who were rated by peers as being more humorous were more likely to be picked by other children as someone they would like to do things with, while those rated as less humorous were specifically singled out as children who were liked the least. Since friends and popularity are so important throughout childhood and adolescence, kids with a better sense of humor should also be happier.
Direct expression of aggression or hostility is rarely received positively by either children or adults. Freud noted long ago that humor provides an effective means of expressing aggressive feelings in a way that is not only socially acceptable, but even valued if done cleverly. So one of the most important social functions of humor stems from its inherent ambiguity. By the early elementary school years, kids can use humor to say exactly what we mean or just the opposite.
The negative side of this ambiguity is that kids can make a hostile remark, and then come back with, "Hey, I was only joking," if another child gets upset at the remark. Kids are able to begin using such a "joke façade" around 6 or 7 years of age coincidentally, the same age at which they become capable of understanding double meaning in riddles. The positive side of ambiguity is that kids can begin using humor to disarm hostile comments by others and to manage conflicts. Again, this benefit will not appear until the elementary school years, but kids who cultivate the humor habit during the preschool years become the kids who can use humor in this way later on.