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on Economics of Happiness |
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Issue of 2013‒03‒02
two papers chosen by |
| By: | Paul Dolan; Grace Lordan |
| Abstract: | Many people remain in the same income group as their parents and this is a cause of much discussion and some concern. In this work, we examine how intergenerational mobility affects subjective wellbeing (SWB) using the British Cohort Study. Our SWB measures encapsulate life satisfaction and mental health. We find that relative income mobility is a significant predictor of life satisfaction and mental health whether people move upward or downward. For absolute income, mobility is only a predictor of SWB and mental health outcomes if the person moves downward. We also explore pathways through which income mobility can impact on these outcomes. In particular, we present evidence that suggests much of the effect of income mobility on SWB is due to changes in the perception of financial security. But those who slide down are still less satisfied with their lives over and above any effect of financial insecurity. Overall, there is an asymmetric effect of income mobility: the losses of sliding on down are larger than the gains of moving up. |
| Keywords: | income mobility, social mobility, inter-generational, life satisfaction, SWB, subjective wellbeing, mental health |
| JEL: | D31 D63 I1 I14 J60 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1190&r=hap |
| By: | Justin Wolfers; Daniel W. Sacks; Betsey Stevenson |
| Abstract: | In recent decades economists have turned their attention to data that asks people how happy or satisfied they are with their lives. Much of the early research concluded that the role of income in determining well-being was limited, and that only income relative to others was related to well-being. In this paper, we review the evidence to assess the importance of absolute and relative income in determining well-being. Our research suggests that absolute income plays a major role in determining well-being and that national comparisons offer little evidence to support theories of relative income. We find that well-being rises with income, whether we compare people in a single country and year, whether we look across countries, or whether we look at economic growth for a given country. Through these comparisons we show that richer people report higher well-being than poorer people; that people in richer countries, on average, experience greater well-being than people in poorer countries; and that economic growth and growth in well-being are clearly related. Moreover, the data show no evidence for a satiation point above which income and well-being are no longer related. |
| Keywords: | Subjective well-being, life satisfaction, quality of life, Easterlin Paradox, adaptation, economic growth |
| JEL: | D6 I3 J1 O1 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2013-03&r=hap |