nep-hap New Economics Papers
on Economics of Happiness
Issue of 2013‒05‒22
two papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Regional Unemployment and Norm-Induced Effects on Life Satisfaction By Adrian Chadi
  2. The Marginal Income Effect of Education on Happiness: Estimating the Direct and Indirect Effects of Compulsory Schooling on Well-Being in Australia By Nattavudh Powdthavee; Warn N. Lekfuangfu; Mark Wooden

  1. By: Adrian Chadi (Institute for Labour Law and Industrial Relations in the EU, University of Trier)
    Abstract: While rising unemployment generally reduces people’s happiness, researchers argue that there is a compensating social-norm effect for the unemployed individual, who might suffer less when it is more common to be unemployed. This empirical study rejects this thesis for German panel data, however, and finds that individual unemployment is even more hurtful when regional unemployment is higher. On the other hand, an extended model that separately considers individuals who feel stigmatised from living off public funds yields strong evidence that this group of people does in fact suffer less when the normative pressure to earn one’s own living is lower. A comprehensive discussion reconciles these findings with the existing research and concludes that in order to find evidence for the often-described social-norm effect it is worthwhile to analyse disutility associated with benefit receipts.
    Keywords: social norms, regional unemployment, individual unemployment, well-being, social benefits, labour market policies
    JEL: I3 J6
    Date: 2013–04
  2. By: Nattavudh Powdthavee (Centre for Economic Performance, London School of Economics: and Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Warn N. Lekfuangfu (University College London); Mark Wooden (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: Many economists and educators favour public support for education on the premise that education imporves the overall well-being of citizens. However, little is known about the casual pathwasy through which education shapes people's subjective well-being (SWB). This paper explores the direct and indirect well-being effects of extra schooling induced through compulsory schooling laws in Australia. We find the net effect of schooling on later SWB to be positive, though this effect is larger and statistically more robust for men than for women. We then show that the compulsory schooling effect on male's SWB is indirect and is mediated through income.
    Keywords: Schooling, indirect effect, well-being, mental health, windfall income, HILDA survey
    JEL: I20 I32 C36
    Date: 2013–04

This nep-hap issue is ©2013 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.