New Economics Papers
on Economics of Happiness
Issue of 2008‒07‒14
five papers chosen by

  1. A Note on the High Stability of Happiness : The Minimal Effects of a Nuclear Catastrophe on Life Satisfaction By Eva M. Berger
  2. Adult height and childhood disease By Carlos Bozzoli; Angus Deaton; Climent Quintana
  3. Self-Esteem and Earnings By Drago, Francesco
  4. Work-Life Balance Practices and the Gender Gap in Job Satisfaction in the UK: Evidence from Matched Employer-Employee Data By Asadullah, Niaz; Fernández, Rosa M.
  5. The Value of Life in General Equilibrium By Anupam Jena; Casey Mulligan; Tomas J. Philipson; Eric Sun

  1. By: Eva M. Berger
    Abstract: Using life satisfaction as a direct measure of individual utility has become popular in the empirical economic literature. In this context, it is crucial to know what circumstances or changes the measure is sensitive to. Is life satisfaction a volatile concept that is affected by minor changes in life circumstances? Or is it a reliable measure of personal happiness? This paper will analyze the impact of a catastrophe, namely the nuclear catastrophe of Chernobyl, on life satisfaction. I use longitudinal data from the German Socio-Economic Panel Study and especially information collected on a monthly basis which allows the researcher to study calendar effects. The following clear-cut results are found. While concern about the environment rose immediately after the nuclear incident, life satisfaction changed little. This suggests that although people were aware of the severity of the catastrophe, they did not feel that their individual well-being had been affected. This finding is highly relevant to the life satisfaction literature as it shows that the life satisfaction measure is very stable and robust against societal and global events. It is shown to predominantly reflect personal life circumstances like health, employment, income, and the family situation and this relationship is apparently not disturbed by global events. Thus, my results reinforce previous findings on the relationship between life satisfaction and individual life characteristics as the stability of their outcome measure is approved.
    Keywords: Subjective Well-Being, Happiness, Environmental Protection, Household Panel, SOEP
    JEL: I31 A12 A19
    Date: 2008
  2. By: Carlos Bozzoli; Angus Deaton; Climent Quintana
    Abstract: Taller populations are generally richer populations, and taller individuals live longer and earn more, perhaps reflecting their superior cognitive abilities. Understanding the determinants of adult height has thus become a focus in understanding the relationship between health and wealth. We investigate the childhood determinants of adult height in populations, focusing on the respective roles of income and of disease. Across a range of European countries and the United States, we find a strong inverse relationship between postneonatal (one month to one year) mortality, interpreted as a measure of the disease and nutritional burden in childhood, and the mean height of those children as adults. In pooled birth-cohort data over 31 years for the United States and eleven European countries, postneonatal mortality in the year of birth accounts for more than 60 percent of the combined cross-country and cross-cohort variation in adult heights. The estimated effects are smaller but remain significant once we allow for country and birth-cohort effects. The decline in postneonatal mortality from 1950 to 1980 can account for almost all of the increase in adult height for those born in those years, and explains 20 to 30 percent of the 2 cm shortfall of 30 yearold Americans relative to 30-year old Swedes in 2000. Consistent with these findings, we develop a model of selection and stunting, in which the early life burden of nutrition and disease is not only responsible for mortality in childhood but also leaves a residue of long-term health risks for survivors, risks that express themselves in adult height, as well as in late-life disease. The model predicts that, at sufficiently high mortality levels, selection can dominate scarring, leaving a taller population of survivors. We find evidence of this effect in the poorest and highest mortality countries of the world, supplementing recent findings on the effects of the Great Chinese famine.
    Date: 2008–07
  3. By: Drago, Francesco (University of Naples, Parthenope)
    Abstract: Recent research in economics suggests a positive association between self-esteem and earnings. A major problem in this literature is that from simple cross-sectional wage regressions it is not possible to conclude that self-esteem has a causal impact on earnings. While classical measurement error leads to an attenuation bias, reverse causality and omitted variable are likely to drive the OLS coefficient on self-esteem upward. Using the National Longitudinal Survey of Youth (NLSY) that administered the Rosenberg Self-Esteem Scale during the 1980 and 1987 interviews, I provide further evidence for the existence of a self-esteem premium by exploiting variation in these measures in the two years. I show that the estimated impact of self-esteem in 1987 on earnings is about two times greater than previous OLS estimates would imply. The main explanation for this result is the large extent of measurement error in the reported self-esteem measure.
    Keywords: self-esteem, wages, NLSY
    JEL: J13 J30
    Date: 2008–07
  4. By: Asadullah, Niaz (University of Reading); Fernández, Rosa M. (University of Oxford)
    Abstract: This paper examines the role of work-life balance practices (WLB) in explaining the “paradox of the contented female worker”. After establishing that females report higher levels of job satisfaction than men in the UK, we test whether firm characteristics such as WLB and gender segregation boost the satisfaction of women proportionately more than that of men, thereby explaining why the former are reportedly happier. The results prove that WLB practices increase the likelihood of reporting higher satisfaction but similarly for both demographic groups thereby reducing the gender gap in job satisfaction only slightly. Still, the results indicate that WLB practices at the forefront of worker welfare policy improve the wellbeing of the workforce. Experiments with firm-fixed effects allowed by the matched dimension of the data reveal that firm effects are relevant but they only explain a half of the gender gap in job satisfaction, suggesting that the other half may be due to individual heterogeneity.
    Keywords: job satisfaction, work-life balance practices, gender segregation, matched employer-employee data
    JEL: C13 J16 J28 J71
    Date: 2008–07
  5. By: Anupam Jena; Casey Mulligan; Tomas J. Philipson; Eric Sun
    Abstract: Perhaps the most important change of the last century was the great expansion of life itself -- in the US alone, life expectancy increased from 48 to 78 years. Recent economic estimates confirm this claim, finding that the economic value of the gain in longevity was on par with the value of growth in material well-being, as measured by income per capita. However, ever since Malthus, economists have recognized that demographic changes are linked to economic behavior and vice versa. Put simply, living with others who live 78 years is different than living with others who live only 48 years, so that valuing the extra 30 years of life is not simply a matter of valuing the extra years a single individual lives. The magnitude by which such valuations differ is overstated when there are increasing returns to population and is understated under decreasing returns. Focusing on the gains in life expectancy in the United States from 1900 to 2000, we find that a significant part of the value of longer life may be affected by these general equilibrium demographic effects.
    JEL: I1 I10 I31 J1 J17 O1
    Date: 2008–07

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