nep-hap New Economics Papers
on Economics of Happiness
Issue of 2009‒04‒25
seven papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Happiness and Growth the World Over: Time Series Evidence on the Happiness-Income Paradox By Easterlin, Richard A.; Angelescu, Laura
  2. Cheaper Child Care, More Children By Eva Mörk; Anna Sjögren; Helena Svaleryd
  3. The Intra-household Economics of Polygyny: Fertility and Child Mortality in Rural Mali By Kazianga, Harounan; Klonner, Stefan
  4. Child Health and the Income Gradient: Evidence from Australia By Khanam, Rasheda; Nghiem, Hong Son; Connelly, Luke B.
  5. (Un)Happiness in Transition By Guriev, Sergei; Zhuravskaya, Ekaterina
  6. The Long Term Consequences of Famine on Survivors: Evidence from a Unique Natural Experiment using China's Great Famine By Xin Meng; Nancy Qian
  7. Inequality and the Measurement of Residential Segregation by Income In American Neighborhoods By Tara Watson

  1. By: Easterlin, Richard A. (University of Southern California); Angelescu, Laura (University of Southern California)
    Abstract: There is no significant relationship between the improvement in happiness and the long term rate of growth of GDP per capita. This is true for three groups of countries analyzed separately − 17 developed, 9 developing, and 11 transition − and also for the 37 countries taken together. Time series studies reporting a positive relationship confuse a short-term positive association between the growth of happiness and income, arising from fluctuations in macroeconomic conditions, with the long-term relationship, which is nil.
    Keywords: happiness, economic growth, developing countries, transition countries, developed countries
    JEL: I31 D60 O10 P27
    Date: 2009–03
  2. By: Eva Mörk (IFAU and Uppsala University); Anna Sjögren (IFAU); Helena Svaleryd (IFN)
    Abstract: We study the effect of child care costs on the fertility behavior of Swedish women and find that reductions in child care charges influence fertility decisions, even when costs are initially highly subsidized. Exploiting the exogenous variation in child care costs caused by a Swedish child care reform, we are able to identify the causal effect of child care costs on fertility in a context in which child care enrolment is almost universal and the labor force participation of mothers is very high. A typical household planning another child experienced a reduction in expected future child care costs of SEK 106,000 (USD 17,800). This reduction resulted in 3–5 more child births per 1,000 women during an 18 month period, which corresponds to a 4–6 per cent increase in the birth rate.
    Keywords: Child Care, Cost of children, Fertility, Quasi-experiment, Difference-in-differences.
    JEL: H31 J13
    Date: 2009
  3. By: Kazianga, Harounan; Klonner, Stefan
    Abstract: Building on anthropological evidence, we develop a model of intra-household decision making on fertility and child survival within the framework of the collective household model. We carry out a test of the implications of this framework with data from Demographic and Health Surveys in rural Mali, where polygyny rates among married women are close to 50 per cent. The econometric tests reject the implications of efficient intra-household allocations for junior wives in bigynous households and fail to reject for senior wives in bigynous households as well as for wives in monogamous households. These findings are consistent with existing narrative evidence according to which co-wife rivalry is responsible for resource-consuming struggle and junior wives are the adults with the weakest bargaining position in the household.
    Keywords: intrahousehold models; polygyny; child mortality; fertility; Mali
    JEL: J13 D13 I12 O15
    Date: 2009–04–21
  4. By: Khanam, Rasheda; Nghiem, Hong Son; Connelly, Luke B.
    Abstract: The positive relationship between household income and child health is well documented in the child health literature but the precise mechanisms via which income generates better health and whether the income gradient is increasing in child age are not well understood. This paper presents new Australian evidence on the child health-income gradient. We use data from the Longitudinal Survey of Australian (LSAC), which involved two waves of data collection for children born between March 2003 and February 2004 (B-Cohort), and between March 1999 and February 2000 (K-Cohort). This data set allows us to test the robustness of some of the findings of the influential studies of Case et al. (2002) and J.Currie and Stabile (2003), and a recent study by A.Currie et al. (2007) , using a sample of Australian children. The richness of the LSAC data set also allows us to conduct further exploration of the determinants of child health. Our results reveal an increasing income gradient by child age using similar covariates to Case et al. (2002). However, the income gradient disappears if we include a rich set of controls. Our results indicate that parental health and, in particular, the mother's health plays a significant role, reducing the income coefficient to zero. Thus, our results for Australian children are similar to those produced by Propper et al. (2007) on their British child cohort. We also find some evidence that higher incomes have a protective effect when health shocks do arise: for several chronic conditions, children from higher-income households are less likely to be reported as being in poor health than children from lower-income households who have the same chronic conditions. The latter result is similar to some recent findings by Condliffe and Link (2008) on a sample of US children.
    Keywords: Child health; Income gradient; Parental health; Nutrition; Panel data; Australia
    JEL: J13 I12 I1
    Date: 2008–11
  5. By: Guriev, Sergei; Zhuravskaya, Ekaterina
    Abstract: Despite strong growth performance in transition economies in the last decade, residents of transition countries report abnormally low levels of life satisfaction. Using data from the World Values Survey and other sources, we study various explanations of this phenomenon. First, we document that the disparity in life satisfaction between residents of transition and non-transition countries is much larger among the elderly. Second, we find that deterioration in public goods provision, an increase in macroeconomic volatility, and a mismatch of human capital of residents educated before transition which disproportionately affected the aged population explain a great deal of the difference in life satisfaction between transition countries and other countries with similar income and other macroeconomic conditions. The rest of the gap is explained by the difference in the quality of the samples. As in other countries, life satisfaction in transition countries is strongly related to income; but, due to a higher non-response of high-income individuals in transition countries, the survey-data estimates of the recent increase in life satisfaction, driven by 10-year sustained economic growth in transition region, are biased downwards. The evidence suggests that if the region keeps growing at current rates, life satisfaction in transition countries will catch up with the "normal" level in the near future.
    Keywords: happiness; satisfaction; transition; unhappiness
    JEL: A13 I21 P36
    Date: 2009–04
  6. By: Xin Meng; Nancy Qian
    Abstract: This paper estimates the long run impact of famine on survivors in the context of China's Great Famine. To address problems of measurement error of famine exposure and potential endogeneity of famine intensity, we exploit a novel source of variation in regional intensity of famine derived from the unique institutional determinants of the Great Famine. To address attenuation bias caused by selection for survival, we estimate the impact on the upper quantiles of the distribution of outcomes. Our results indicate that in-utero and early childhood exposure to famine had large negative effects on adult height, weight, weight-for-height, educational attainment and labor supply.
    JEL: I1 J01 J1 O1
    Date: 2009–04
  7. By: Tara Watson
    Abstract: American metropolitan areas have experienced rising residential segregation by income since 1970. One potential explanation for this change is growing income inequality. However, measures of residential sorting are typically mechanically related to the income distribution, making it difficult to identify the impact of inequality on residential choice. This paper presents a measure of residential segregation by income, the Centile Gap Index (CGI) which is based on income percentiles. Using the CGI, I find that a one standard deviation increase in income inequality raises residential segregation by income by 0.4-0.9 standard deviations. Inequality at the top of the distribution is associated with more segregation of the rich, while inequality at the bottom and declines in labor demand for less-skilled men are associated with residential isolation of the poor. Inequality can fully explain the rise in income segregation between 1970 and 2000.
    JEL: R21
    Date: 2009–04

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