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on Economics of Happiness |
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Issue of 2010‒02‒13
eight papers chosen by |
| By: | Salvatori, Andrea (ISER, University of Essex) |
| Abstract: | All industrialized countries have Employment Protection Legislation (EPL) for permanent workers and Restrictions on the use of Temporary Employment (RTE). The (ambiguous) effects of these on the levels of employment and unemployment have been extensively studied, but nothing is known empirically about their well-being implications. Using longitudinal data from the European Community Household Panel, the author conducts the first study of the link between both EPL and RTE and workers' wellbeing. The results provide evidence that both permanent and temporary employees gain from reforms that ease restrictions on temporary employment but leave firing costs for permanent workers unchanged. This finding contrasts with common claims found in the political economy literature. |
| Keywords: | temporary employment, employment protection legislation, job satisfaction |
| JEL: | J28 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4685&r=hap |
| By: | Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC)); Ramos, Xavi (Universitat Autònoma de Barcelona) |
| Abstract: | Using self reported measures of life satisfaction and risk attitudes, we empirically test whether there is a relationship between individuals inequality and risk aversion. The empirical analysis uses the German SOEP household panel for the years 1997 to 2007 to conclude that the negative effect of inequality measured by the sample gini coefficient by year and federal state is larger for those individuals who report to be less willing to take risks. Nevertheless, the empirical results suggest that even though inequality and risk aversion are related, they are not the same thing. The paper shows that the relationship between risk attitudes and inequality aversion survives the inclusion of individual characteristics (i.e. income, education, and gender) that may be correlated with both risk attitudes and inequality aversion. |
| Keywords: | happiness, inequality aversion, risk attitudes, well-being |
| JEL: | D3 D63 I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4703&r=hap |
| By: | Oswald, Andrew J. (University of Warwick); Wu, Stephen (Hamilton College) |
| Abstract: | A huge research literature, across the behavioral and social sciences, uses information on individuals' subjective well-being. These are responses to questions – asked by survey interviewers or medical personnel – such as "how happy do you feel on a scale from 1 to 4?" Yet there is little scientific evidence that such data are meaningful. This study examines a 2005-2008 Behavioral Risk Factor Surveillance System random sample of 1.3 million United States citizens. Life-satisfaction in each U.S. state is measured. Across America, people's answers trace out the same pattern of quality of life as previously estimated, using solely non-subjective data, in a literature from economics (so-called 'compensating differentials' neoclassical theory due originally to Adam Smith). There is a state-by-state match (r = 0.6, p < 0.001) between subjective and objective well-being. This result has some potential to help to unify disciplines. |
| Keywords: | compensating differentials, well-being, happiness, spatial equilibrium |
| JEL: | I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4695&r=hap |
| By: | Bell, David N.F. (University of Stirling); Blanchflower, David G. (Dartmouth College) |
| Abstract: | This paper reviews current issues in youth labour markets in developed countries. It argues that young people aged 16-25 have been particularly hard hit during the current recession. Using the USA and UK as cast studies, it analyses both causes and effects of youth unemployment using micro-data. It argues that there is convincing evidence that the young are particularly susceptible to the negative effects of spells of unemployment well after their initial experience of worklessness. Because the current youth cohort is relatively large, the longer-term outlook for youth unemployment is quite good, but there is a strong case for policy intervention now to address the difficulties that the current cohort is having in finding access to work. |
| Keywords: | youth unemployment, scarring, ethnic crime, health, life satisfaction, wages, ALMP |
| JEL: | J01 J11 J21 J23 J38 J64 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4705&r=hap |
| By: | Booth, Alison L. (Australian National University); van Ours, Jan C. (Tilburg University) |
| Abstract: | Part-time jobs are popular among partnered women in many countries. In the Netherlands the majority of partnered working women have a part-time job. Our paper investigates, from a supply-side perspective, if the current situation of abundant part-time work in the Netherlands is likely to be a transitional phase that will culminate in many women working full-time. We analyze the relationship between part-time work and life satisfaction, and between job satisfaction and preferred working hours using panel data on life and job satisfaction for a sample of partnered women and men. We also utilize time-use data to consider the distribution within the household of market work and housework, and discuss the work specialization hypothesis in this context. Our main results indicate that partnered women in part-time work have high levels of job satisfaction, a low desire to change their working hours, and live in partnerships in which household production is highly gendered. Taken together, our results suggest that part-time jobs are what most Dutch women want. |
| Keywords: | part-time work, happiness, satisfaction, working hours, gender |
| JEL: | J22 I31 J16 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4686&r=hap |
| By: | Pouliakas, Konstantinos (University of Aberdeen) |
| Abstract: | Using ten waves (1998-2007) of the British Household Panel Survey (BHPS), this paper investigates the ceteris paribus association between the intensity of incentive pay, the dynamic change in bonus status and the utility derived from work. After controlling for individual heterogeneity biases, it is shown that job utility rises only in response to 'generous' bonus payments, primarily in skilled, non-unionized, private sector jobs. Revoking a bonus from one year to the next is found to have a detrimental impact on employee utility, while job satisfaction tends to diminish over time as employees potentially adapt to bonuses. The findings are therefore consistent with previous experimental evidence, suggesting that employers wishing to motivate their staff should indeed "pay enough or don't pay at all". |
| Keywords: | incentives, intensity, bonus, performance pay, job satisfaction |
| JEL: | C23 J28 J33 M52 M54 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4713&r=hap |
| By: | Paolo Verme (University of Torino) |
| Abstract: | The paper focuses on satisfaction with income and proposes a utility model built on two value systems, the `Ego' system - described as one own income assessment relatively to one own past and future income - and the `Alter' system - described as one own income assessment relatively to a reference group. We show how the union of these two value systems and the use of relative deprivation measures can lead to a model able to accommodate a wide range of theories on income and happiness. The model is then tested using the Consortium of Household Panels for European Socio-economic Research (CHER), a collection of 19 panel surveys including over 1.2 m. individual observations. We find absolute income to sit at the intersection between the `Ego' and the `Alter' systems and to play the most prominent role in explaining satisfaction with income. Relative deprivation is also found to be important for understanding the income-happiness nexus while we find income expectations to be less relevant once we control for absolute income. Overall, the `Alter' system (the cross-section comparison with others) seems to be more relevant in valuing income than the `Ego' system (the longitudinal self-comparison of income). |
| Keywords: | happiness, deprivation, inequality. |
| JEL: | D6 I3 J3 O1 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2010-155&r=hap |
| By: | Boudarbat, Brahim; Lemieux, Thomas; Riddell, W. Craig |
| Abstract: | We examine the evolution of the returns to human capital in Canada over the period 1980-2005. Our main finding is that returns to education increased substantially for Canadian men, contrary to conclusions reached previously. Most of this rise took place in the early 1980s and since 1995. Returns to education also rose, albeit more modestly, for Canadian women. Another important development is that after years of expansion, the wage gap between younger and older workers stabilized after 1995. Controlling for work experience and using Canadian Census data appear to account for the main differences between our results and earlier findings. |
| Keywords: | Human Capital, Wage Differentials, Canada |
| JEL: | J24 J31 |
| Date: | 2010–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2010-2&r=hap |