New Economics Papers
on Economics of Happiness
Issue of 2013‒05‒19
six papers chosen by

  1. New Developments in the Measurement of Welfare and Well-being By Bernard M.S. van Praag; Erik J.S. Plug
  2. On the Measurement of Success and Satisfaction By René van den Brink; Frank Steffen
  3. The ABC of Housing Strategies: Are Housing Assistance Programs Effective in Enhancing Children's Well Being? By Jose Rosero
  4. Language Proficiency of Migrants: The Relation with Job Satisfaction and Matching By Bloemen, Hans
  5. Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining? By Böckerman, Petri; Maliranta, Mika
  6. Heaven knows I’m miserable now: overeducation and reduced life satisfaction By Piper, Alan T.

  1. By: Bernard M.S. van Praag (University of Amsterdam); Erik J.S. Plug (University of Amsterdam)
    Abstract: This paper is dating from 1995, when it has been presented at the Ragnar Frisch Centennial Memorial Conference in Oslo. It has never been published before. In this paper for the first time the Cantril ladder question data have been employed in the way which later has become known as happiness economics. After two introductory sections 1and 2, Section 3 explains the Leyden School methodology to estimate financial satisfaction or in traditional terms a (cardinal) welfare function of money. In Section 4 the Cantril ladder question is employed to estimate a function of satisfaction with life as a whole. It is found that well-being is quadratic in the number of children, leading to an optimum number of children, given income and given the fact of a one-breadwinner- or two- breadwinners-family. In Section 5 the effects of children on financial satisfaction and on satisfaction with life as a whole are compared. With respect to financial satisfaction it is found that the more children there are the smaller financial satisfaction. Comparison of the two effects makes it possible to distinguish between the monetary cost associated with having children and the non-monetary benefits caused by having children. Part of this paper is based on Plug and Van Praag (1995).
    Keywords: happiness economics, Leyden School, Cantril Ladder, family equivalence scales, costs and benefits of children
    JEL: B50 D19 J1 D6
    Date: 2012–01–16
  2. By: René van den Brink (VU University Amsterdam); Frank Steffen (The University of Liverpool Management School)
    Abstract: The main purpose of the present paper is to disentangle the mix-up of the notions of success and satisfaction which is prevailing in the voting power literature. We demonstrate that both notions are conceptually distinct, and discuss their relationship and measurement. We show that satisfaction contains success as one component, and that both coincide under the canonical set-up of a simultaneous decision-making mechanism as it is predominant in the voting power literature. However, we provide two examples of sequential decision-making mechanisms in order to illustrate the difference between success and satisfaction. In the context of the discussion of both notions we also address their relationship to different types of luck.
    Keywords: success, satisfaction, luck, power
    JEL: C79 D02 D71
    Date: 2012–03–27
  3. By: Jose Rosero (University of Amsterdam)
    Abstract: This paper examines the effect of a housing assistance program on school enrollment, child labor and poverty reduction among poor families in Ecuador. Administrative data is merged to a household panel to link the history of a voucher application with socioeconomic information. Two empirical approaches are employed. First, I exploit variation in duration of the different stages to obtain a voucher and convert it into a house, using a sample of approved applicants. Second, I use variation across siblings that arises from the fact that siblings are exposed to the program at different ages. Results show that the program improves enrollment into post-compulsory education, decreases the probability that a child participates in the labor market and reduces the likelihood to live in poverty. Potential mediating factors are increased access to sanitation, better quality materials of the house and a reduced probability to live overcrowded.
    Keywords: Housing assistance programs, Housing voucher, Children, Fixed Effects, Within family estimators, Developing country, Ecuador
    JEL: H53 I28 I38 R21
    Date: 2012–07–19
  4. By: Bloemen, Hans (VU University Amsterdam)
    Abstract: We empirically analyze the language proficiency of migrants in the Netherlands. Traditionally, the emphasis in studying language proficiency and economic outcomes has been on the relation between earnings and indicators for language proficiency, motivated by the human capital theory. Here we analyze whether there is a relation between proficiency of the destination language and job level. A lack of language skills may induce the migrant to work in jobs of a lower level leading to lower job satisfaction. We use subjective survey information about job satisfaction and the fit between the migrant's education and skill level and the job. We also use objective information on professional level. For men, we find evidence for a positive relationship between indicators for language proficiency and satisfaction with work type and professional level.
    Keywords: immigrants, skills, job satisfaction
    JEL: J15 J24 J28
    Date: 2013–04
  5. By: Böckerman, Petri (Labour Institute for Economic Research); Maliranta, Mika (ETLA - The Research Institute of the Finnish Economy)
    Abstract: This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion.
    Keywords: globalization, outsourcing, offshoring, downsizing, working conditions, subjective well-being, job satisfaction
    JEL: J28 F23
    Date: 2013–05
  6. 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, avoiding the possibility that overeducation may 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, and a key reason for this relates to comparisons (both with others, and the past). Using dynamic panel analysis, to account for omitted dynamics, such an association is found: the relatively overeducated seem to be relatively less happy. This result appears to fade over time, consistent with the relative comparisons notion. In addition, evidence is presented that income compensates somewhat for the loss of life satisfaction incurred by the overeducation.
    Keywords: Life Satisfaction; Happiness; Overeducation; Dynamic Panel Analysis; BHPS
    JEL: I31 A2 C33
    Date: 2012–07

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