New Economics Papers
on Economics of Happiness
Issue of 2013‒01‒07
five papers chosen by

  1. The Impact of the German Child Benefit on Child Well-Being By Christian Raschke
  2. Heterogeneity in Union Status and Employee Well-Being: Some New Evidence from Linked Employer-Employee Data By Haile, Getinet Astatike; Bryson, Alex; White, Michael
  3. Recent Developments in the Economics of Happiness: A Selective Overview By Stutzer, Alois; Frey, Bruno S.
  4. Family Structure and the Economic Wellbeing of Children By Leonard Lopoo; Thomas DeLeire
  5. Heaven knows I’m miserable now: overeducation and reduced life satisfaction By Piper, Alan T.

  1. By: Christian Raschke
    Abstract: The German Child Benefit ("Kindergeld") is paid to legal guardians of children as a cash benefit. This study employs exogenous variations in the amount of child benefit received by households to investigate the extent to which these various changes have translated into an improvement in the circumstances of children related to their well-being. I use the German Socio-Economic Panel to estimate the impact of a given change in the child benefit on food expenditures of households, the probability of owning a home, the size of the home, as well as the probability of parents’ smoking, alcohol consumption, and parents’ social activities such as traveling, visiting movie theaters, going to pop concerts, attending classical music concerts or other cultural events. Households primarily increase per capita food expenditures in response to increases in child benefit, and they also improve housing conditions. I do not find a significant effect of child benefit on parents’ smoking or drinking, but parents of older children use the child benefit to pay for their social and personal entertainment activities.
    Keywords: child benefit, fungibility of income, child well-being
    JEL: I38 D12 H31
    Date: 2012
  2. By: Haile, Getinet Astatike (University of Nottingham); Bryson, Alex (National Institute of Economic and Social Research (NIESR)); White, Michael (Policy Studies Institute)
    Abstract: This paper examines if workplace and co-worker union status affect employee wellbeing. It departs from the standard approach in the literature by employing an innovative approach, which focuses principally on non-union employees. It uses two different measures of wellbeing, offering a richer framework than has been used in much of the literature. Using linked employer-employee data confined to the private sector and employing alternative econometric estimators, the paper finds that being in a union workplace and having union co-workers affect the job satisfaction of non-union employees negatively, lending some support to the sorting hypothesis. No such link is found with respect to affective wellbeing outcomes on the other hand.
    Keywords: trade union, well-being, linked employer-employee data, Britain
    JEL: J5 J51 J28 J82
    Date: 2012–12
  3. By: Stutzer, Alois (University of Basel); Frey, Bruno S. (University of Zurich)
    Abstract: What makes people happy in life? This is a crucial question that has the potential to shake up economics. In recent years, the dissatisfaction with the understanding of welfare in economics together with the new opportunities to empirically study people's subjective wellbeing have spurred impressive and stimulating new research in the often called dismal science. The economics of happiness has emerged as one of the most thriving areas in current economic research. This introductory chapter refers to important contributions to the economics of happiness that characterize the recent developments in the area. First, we refer to reviews of the literature, the measurement and the relationship of happiness research to welfare economics. Second, we emphasize four factors from the large literature on the determinants of happiness in economics, i.e. income, employment, social capital and health. In fact, the main body of research in this new area is on the preconditions or covariates of high individual well-being. Third, important studies applying the so-called Life Satisfaction Approach as an alternative valuation approach are discussed. Fourth, we point to contributions that elaborate on the understanding of utility in terms of people's adaptation to circumstances and their difficulties in predicting future utility. Fifth, we provide references to the controversial question regarding the policy consequences of this new development.
    Keywords: happiness, individual welfare, Life Satisfaction Approach, subjective well-being
    JEL: I31
    Date: 2012–12
  4. By: Leonard Lopoo (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Thomas DeLeire (University of Wisconsin Madison)
    Abstract: An extensive literature that examines the relationship between family structure and children’s outcomes consistently shows that living with a single parent is associated with negative outcomes. Few studies, however, directly test the relationship between family structure and outcomes for the child once he/she reaches adulthood. We directly examine, using the Panel Study of Income Dynamics, whether family structure during childhood is related to the child’s economic wellbeing both during childhood as well as adulthood. Our findings suggest that the economic wellbeing of children of mothers who experience a marital dissolution and remarry are no different from the children of mothers who are continuously married. However, the children of mothers whose marriages dissolve but who do not remarry experience large declines in their income over their first ten years of life. We also show that while the children of never married mothers earn a lot less as adults than the children of married parents, these differences can largely be explained by demographic and socioeconomic factors. Finally, our findings suggest that children who have mothers who experience a marital dissolution and who do not remarry have economic losses that persist into adulthood. Robustness checks using family fixed effects models support this result. Key Words: Family Structure JEL No. J12
    Date: 2012–08
  5. By: Piper, Alan T.
    Abstract: This study is an investigation into relative overeducation and life satisfaction using British longitudinal data. The focus is on young people rather than the whole of the life cycle, an arguably more homogenous group. Such a focus means that the overeducation variable does not simply capture the increased participation in Higher Education of the young. The hypothesis is that there is a negative relationship between being overeducated and life satisfaction. Overeducation is measured using the realised matches approach, a statistical measurement comparing an individual’s years of schooling with the average for one of two employment based reference groups. Using dynamic panel analysis, to account for the presence of serial correlation, such an association is found: the relatively overeducated seem to be relatively less happy.
    Keywords: Life Satisfaction; Happiness; Overeducation; Dynamic Panel Analysis; BHPS
    JEL: I31 A2 C33
    Date: 2012–07

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