nep-hap New Economics Papers
on Economics of Happiness
Issue of 2008‒04‒15
seven papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Formal Institutions and Subjective Well-Being: Revisiting the Cross-Country Evidence. By Bjørnskov, Christian; Dreher, Axel; Fischer, Justina AV
  2. Relational goods, sociability, and happiness. By Becchetti Leonardo; Pelloni Alessandra; Rossetti Fiammetta
  3. Never the same after the first time: The satisfaction of the second-generation self-employed. By Andrew E. Clark; Nathalie Colombier; David Masclet
  4. Subjective Well-Being: Estonia in an International Comparison By Anu Randveer
  5. Unmarried fertility, crime, and cocial stigma By Kendall, Todd; Tamura, Robert
  6. Social Deprivation and Exclusion of Immigrants in Germany By John P. Haisken-DeNew; John P. Haisken-DeNew and Mathias Sinning
  7. Clash of Career and Family - Fertility Decisions after Job Displacement By Emilia Del Bono; Andrea Weber; Rudolf Winter-Ebmer

  1. By: Bjørnskov, Christian (Dept. of Economics, Aarhus School of Business, University of Aarhus); Dreher, Axel (ETH Zurich, KOF Swiss Economic Institute); Fischer, Justina AV (Dept. of Economics, Stockholm School of Economics)
    Abstract: A long tradition in economics explores the association between the quality of formal institutions and economic performance. The literature on the relationship between such institutions and happiness is, however, rather limited. In this paper, we revisit the findings from recent cross-country studies on the institutions-happiness association. Our findings suggest that the conclusions reached by previous studies are fairly sensitive to the specific measure of ‘happiness’ used. In addition, the results indicate that the welfare effects of policies may differ across phases of a country’s economic development. This bears important policy implications which we discuss in the concluding section of the paper.
    Keywords: Happiness; Well-Being; institutions; policy implications; democracy; rule of law; government efficiency
    JEL: H10 H40 I31
    Date: 2008–04–02
  2. By: Becchetti Leonardo; Pelloni Alessandra; Rossetti Fiammetta
    Abstract: The role of sociability and relational goods has generally been neglected in the formulation of standard economics textbook preferences. Our findings show that relational goods have significant and positive effects on self declared life satisfaction, net of the impact of other concurring factors. We also document that such effects persist when the equally significant inverse causality nexus is taken into account. This implies that a more intense relational life enhances life satisfaction and, at the same time, happier people have a more lively social life. Finally, we show that gender, age and education matter by showing that the effects of sociability on happiness are stronger for women, older and less educated individuals.
    JEL: H41 Z13
    Date: 2008–04
  3. By: Andrew E. Clark; Nathalie Colombier; David Masclet
    Abstract: Previous empirical work has shown that the self-employed are generally more satisfied than salaried workers. This paper contributes to the existing literature in two ways. First, using French data from the ECHP and British data from the BHPS, we investigate the domains over which this differential operates. We show that, after controlling for occupation, self-employed workers are generally more satisfied with working conditions and pay, but less satisfied than employees with respect to job security. We then consider the differences between the first- and second-generation self-employed. The first-generation self-employed (those whose parents were not self-employed) are more satisfied overall than are the second-generation self-employed. We argue that this finding is consistent with the self-employed partly comparing their labor market outcomes with those of their parents, as well as parental transfers which loosen the self-employment participation constraint. This result is found in both pooled and panel analysis.
    Date: 2008
  4. By: Anu Randveer (Department of Economics, Tallinn University of Technology)
    Abstract: This paper focuses on two issues of subjective well-being: (1) the relative advantage of using either happiness or life satisfaction as an explanatory variable and either (relative) income or financial satisfaction as an independent variable, and (2) the difference in the level and the factors of subjective well-being between the whole sample countries and a typical transition country – Estonia. The analysis is performed using OLS, based on the World Values Study data from 1995-7. The results of the analysis suggest the advantage of using life satisfaction as a proxy for subjective well-being: life satisfaction is better explained by the same variables as happiness. The explanatory power of the Estonian equations is lower compared to equations based on the whole set of countries; however, the size and signs of coefficients are comparable, although with some interesting differences in the effects of, for example, income, education and immigrant status.
    Keywords: happiness, subjective well-being, life satisfaction, financial satisfaction, post-Soviet countries, Estonia
    JEL: I31 O57
    Date: 2007
  5. By: Kendall, Todd; Tamura, Robert
    Abstract: Children born to unmarried parents may receive lower human capital investments in youth, leading to higher levels of criminal activity as adults. Therefore, unmarried fertility may be positively associated with future crime. On the other hand, in an environment in which social stigma attached to non-marital fertility is high, many low match quality parents will choose (or be forced) to marry, and children reared in these families may actually be worse off than had their parents not married. We explore these effects empirically, finding that over the long run, unmarried fertility is positively associated with murder and property crime, but that the degree of social stigma has affected this relationship. For instance, our results suggest that some marriages in the 1940s and 1950s were of such low quality that the children involved would have been better off in single-parent households; however, this finding is reversed for marriages in the 1960s and thereafter – many marriages that would have benefited children have since been foregone. We also discuss implications for the debate over the “abortion-crime” link of Donohue and Levitt (2001).
    Keywords: unmarried fertility; abortion; future crime; social stigma
    JEL: J13 Z13 K42
    Date: 2008–04–01
  6. By: John P. Haisken-DeNew; John P. Haisken-DeNew and Mathias Sinning
    Abstract: This paper aims at providing empirical evidence on social exclusion of immigrants in Germany. We demonstrate that when using a conventional definition of the social inclusion index typically applied in the literature, immigrants appear to experience a significant degree of social deprivation and exclusion, confirming much of the economic literature examining the economic assimilation of immigrants in Germany. We propose a weighting scheme that weights components of social inclusion by their subjective contribution to an overall measure of life satisfaction. Using this weighting scheme to calculate an index of social inclusion, we find that immigrants are in fact as "included" as Germans. This result is driven strongly by the disproportionately positive socio- demographic characteristics that immigrants possess as measured by the contribution to their life satisfaction.
    Keywords: Social exclusion, international migration, integration
    JEL: F22 I31 Z13
    Date: 2007–11
  7. By: Emilia Del Bono; Andrea Weber; Rudolf Winter-Ebmer
    Abstract: In this paper we investigate how fertility decisions respond to unexpected career interruptions which occur as a consequence of job displacement. Using an event study approach we compare the birth rates of displaced women with those of women unaffected by job loss after establishing the pre-displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5 to 10% in both the short and medium term (3 and 6 years) and that these effects are largely explained by the response of white collar women.Using an instrumental variable approach we provide evidence that the reduction in fertility is not due to the income loss generated by unemployment but arises because displaced workers undergo a career interruption. These results are interpreted in the light of a model in which the rate of human capital accumulation slows down after the birth of a child and all specific human capital is destroyed upon job loss.
    Keywords: Fertility, unemployment, plant closings, human capital
    JEL: J13 J64 J65 J24
    Date: 2008–01

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