New Economics Papers
on Economics of Happiness
Issue of 2014‒02‒02
fifteen papers chosen by

  1. Institutional Rearing Is Associated with Lower General Life Satisfaction in Adulthood By David Richter; Sakari Lemola
  2. Too Rich to Do the Dirty Work?: Wealth Effects on the Demand for Good Jobs By Luke Haywood
  3. Produzione Agricola e Beni Relazionali By Benedetto Rocchi
  4. Cross-national analysis of gender differences in job satisfaction By HAURET Laetitia; WILLIAMS Donald R.
  5. A Romanian approach of the program "Employee of the month" By Armean, Bianca; Baleanu, Virginia; Irimie, Sabin Ioan
  6. Is Happiness Contagious? Separating Spillover Externalities from the Group-Level Social Context By Tumen, Semih; Zeydanli, Tugba
  7. Job Satisfaction and Reference Wage: Evidence for a Developing Country By Rodrigo Montero; Diego Vasquez
  8. Development through seasonal worker programs : the case of New Zealand's RSE program By Gibson, John; McKenzie, David
  9. Information technologies and subjective well-being: Do material aspirations rise? By Lohmann, Steffen
  10. Direct Evidence on Income Comparisons and Subjective Well-Being By Pannenberg, Markus; Goerke, Laszlo
  11. A weighty issue revisited: the dynamic effect of body weight on earnings and satisfaction in Germany By Kropfhäußer, Frieder; Sunder, Marco
  12. Happiness and the Persistence of Income Shocks By Jüßen, Falko; Bayer, Christian
  13. Testing the Easterlin hypothesis with panel data: The dynamic relationship between life satisfaction and economic growth in Germany and in the UK By Pfaff, Tobias; Hirata, Johannes
  14. Reference-Dependent Effects of Unemployment on Mental Health By Grunow, Martina
  15. The Virtue Ethics Hypothesis: Is there a nexus between virtues and well-being? By Koch, Christian

  1. By: David Richter; Sakari Lemola
    Abstract: We analyzed whether individuals reared in institutions differ in their general life satisfaction from people raised in their families. The data comprised of 19,210 German adults (51.5% female) aged from 17 to 101 years and were provided by the SOEP, an ongoing, nationally representative longitudinal study in Germany. Compared to people raised in families, individuals reared in institutions reported lower general life satisfaction in the manner of a dose response relationship controlling their parents' education and occupational prestige. The association was moderated by participants' age such that with increasing age the association between institutional rearing and lower general life satisfaction decreased. Further, the relationship was partly mediated by the individuals own education/socioeconomic attainment in adulthood, physical health, and relationship status.
    Keywords: life satisfaction; set point theory; early adversity; institutional rearing
    Date: 2013
  2. By: Luke Haywood
    Abstract: Jobs offer different wages and different non-monetary working conditions. This paper investigates how the demand for non-monetary aspects evolves over changing wealth levels. Wages do not perfectly compensate individuals for differential utility of jobs in a labour market with informational frictions. Changes in wealth may then affect preferences for different jobs. Willingness to pay for non-monetary aspects of jobs (measured by job satisfaction for work "in itself") is found to increase with wealth shocks. Duration models are estimated based on the reduced form of a search model. Wealth may play an important role in labour market choices.
    Keywords: Labor supply, wealth, job satisfaction, duration models
    JEL: J21 J28 J32 J64
    Date: 2014
  3. By: Benedetto Rocchi (Dipartimento di Scienza per l'Economia e l'Impresa)
    Abstract: The paper discusses the relevance of “relational goods” in studying the economics of agriculture and food supply chain. The quality of interpersonal relations and the dynamics of relational assets have been proposed as relevant concepts in the interpretation of the happiness paradox in developed economies. After a short overview of the literature, the concept of “relational goods” is used to discuss three specific topics: the role of personal relations in overcoming the information asymmetries in the agro-food system, the organisation of labour in agriculture and the emerging sector of social farming. Quality differentiation increases the importance of credence characteristics in marketing agricultural and food products. The creation of relational assets may ease the solution of this information problem. Moreover, emerging forms in the marketing of agricultural and food products, such as alternative food supply chains, community supported agriculture and farmers’ markets, can be better understood when the production of relational good is taken into account. The dynamics of personal relations is also relevant in explaining the variety of tenancy forms and models of labour organisation in agriculture. A historical example relative to share tenancy in Italy is used to discuss this theme. Finally, the growing sector of social farming (where farming activities are the basis of personal care of individuals with disabilities or social discomfort) clearly shows the economic and social relevance of relational goods. In social farming production activities become the opportunity for a personal “encounter” between the carer and the beneficiary. The nature agricultural production process seems peculiarly suitable to support these forms of personal care. The paper is closed by a discussion on policies to incentive the creation of relational assets in the agro-food system. The possible trade-off between economic incentives and gratuitousness of motivations in producing genuine human relations suggests an indirect approach. The institutional context and the specific regulations should widen the spectrum of modalities available to actors in arranging economic and market relations.
    JEL: A13 D6 Q1
    Date: 2013
  4. By: HAURET Laetitia; WILLIAMS Donald R.
    Abstract: Research over the past two decades has found significant gender differences in subjective job-satisfaction, with the result that women report greater satisfaction than men in some countries. This paper examines the so-called ?gender paradox? using data from the European Social Survey for a subset of fourteen countries in the European Union. We focus on the hypothesis that women place higher values on certain work characteristics than men, which explains the observed differential. Using estimates from Probit and ordered Probit models, we conduct standard Blinder-Oaxaca decompositions to estimate the impact that differential valuations of characteristics have on the gender difference in self-reported job satisfaction. The results indicate that females continue to report higher levels of job satisfaction than do men in some countries, and the difference remains even after controlling for a wide range of personal and job characteristics and working conditions. The decompositions suggest that a relatively small share of the gender differential is attributable to gender differences in the weights placed on working conditions in most countries. Rather, gender differences in job characteristics contribute relatively more to explaining the gender job-satisfaction differential.
    Keywords: job satisfaction; gender; Oaxaca decomposition
    Date: 2013–12
  5. By: Armean, Bianca; Baleanu, Virginia; Irimie, Sabin Ioan
    Abstract: Work motivation was and remained a "hot topic" for management and organizational behavior studies, as well as a major concern for practice of Human Resource Management. While such studies have evidenced a lot of factors of intrinsic and extrinsic motivation having different influences on different people, the motivating practices within organizations were long time focused on common extrinsic motivators such as usual rewards (in the form of money or promotion to higher grades/functions) and threat of punishment. However, during the past few decades more and more organizations worldwide became interested to use some forms and tools of intrinsic motivation for their employees, including recognition programs. Our paper aims to present and discuss how a Romanian organization developed and implemented such a program, based on the popular U.S. organizational practices of contests type "Employee of the Month". Particularly, the study focuses on the specificity of this approach which combines elements of intrinsic and extrinsic motivation, and also attempts to sketch a "profile of the winner employee", based on statistical analysis of data for people who benefited the awards through the program application during 2008-2011.
    Keywords: work motivation, job satisfaction, organizational performance
    JEL: J28 L25 M12 M52
    Date: 2012–01
  6. By: Tumen, Semih; Zeydanli, Tugba
    Abstract: We investigate whether individuals feel happier when others around them are happier in broadly defined worker groups. This will be a formal test of spillovers in happiness. Answering this question requires a careful handling of the reflection problem, as it may not be possible to separate the endogenous spillover effects from contextual effects unless an appropriately designed identification strategy is employed. Implementing such a strategy and using the 2008 release of the British Housing Panel Survey (BHPS), we show that the group-level happiness does not have a statistically significant endogenous effect on individual-level happiness in the Great Britain. We report, however, statistically significant contextual effects in various dimensions including age, education, employer status, and health. These results suggest that higher group-level happiness does not spill over to the individual level in neither negative nor positive sense, while the individual-level happiness is instead determined by social context (i.e., the group-level counterparts of certain observed covariates). We also test the relevance of the "Easterlin paradox" and find that our result regarding the effect of income on happiness -- controlling for social interactions effects -- is the group-level analogue of Easterlin's original results.
    Keywords: Happiness; spillover externalities; contextual effects; social ecologies; reflection problem; BHPS.
    JEL: C31 C36 D03 D62 I31
    Date: 2014–01–25
  7. By: Rodrigo Montero (Facultad de Economía y Empresa, Universidad Diego Portales); Diego Vasquez (Facultad de Economía y Empresa, Universidad Diego Portales)
    Date: 2014–01
  8. By: Gibson, John; McKenzie, David
    Abstract: Seasonal worker programs are increasingly seen as offering the potential to be part of international development policy. New Zealand's Recognised Seasonal Employer program is one of the first and most prominent of programs designed with this perspective. This paper provides a detailed examination of this policy through the first six seasons. This includes the important role of policy facilitation measures taken by governments and aid agencies. The evolution of the program in terms of worker numbers is discussed, along with new data on the (high) degree of circularity in worker movements, and new data on (very low) worker overstay rates. There appears to have been little displacement of New Zealand workers, and new data show Recognised Seasonal Employer workers to be more productive than local labor and that workers appear to gain productivity as they return for subsequent seasons. The program has also benefitted the migrants participating in the program, with increases in per capita incomes, expenditure, savings, and subjective well-being. Taken together, this evidence suggests that the program is largely living up to its promise of a"triple win"for migrants, their sending countries in the Pacific, and New Zealand.
    Keywords: Labor Markets,Work&Working Conditions,Corporate Social Responsibility,Tertiary Education,Labor Standards
    Date: 2014–01–01
  9. By: Lohmann, Steffen
    Abstract: Existing work on the economics of well-being suggests that a person's subjective well-being depends to a large degree on his relative standing within his social environment. In this paper, we examine whether access to modern information and telecommunication technologies has an impact on relative concerns by raising material aspirations. We use cross-sectional data from the fifth wave of the World Values Survey and provide empirical evidence that people who regularly use the internet as a source of information derive relatively less life satisfaction from the same level of income. Using panel data from the European Union Statistics on Income and Living Conditions, we show that households in possession of a computer report needing significantly higher levels of income to make 'ends meet', given their actual level of income and a wide range of socio-economic characteristics. Our results corroborate the hypothesis that modern information technologies raise material aspirations via fostering relative concerns in the society. The empirical findings shed further light on the income-happiness paradox and identify a non-negligible channel how globalization might impact on subjective well-being. --
    JEL: A12 D12 I31
    Date: 2013
  10. By: Pannenberg, Markus; Goerke, Laszlo
    Abstract: Subjective well-being (SWB) is generally argued to rise with relative income. However, direct evidence is scarce on whether and how intensively individuals undertake income comparisons, to whom they relate, and what they perceive their relative income to be. In this paper, novel data with direct information on income comparison intensity and perceived relative income with respect to predetermined reference groups is used to provide evidence on the relationship between income comparisons and SWB. We find negative correlations between comparison intensity and SWB for co-workers, people in the same occupation and friends. For job-related reference groups income comparisons are mostly upwards and perceiving to earn less than the reference group has a strong negative effect on SWB. --
    JEL: D31 D62 I31
    Date: 2013
  11. By: Kropfhäußer, Frieder; Sunder, Marco
    Abstract: We estimate the effect of changes in the body mass index on wages and satisfaction in a panel of German employees. Dynamic models indicate that satisfaction with life in general and with health are responsive to weight changes, but wages and satisfaction with work are not. These results mainly corroborate earlier findings from static panel or cross-sectional models. --
    JEL: J24 J71 I31
    Date: 2013
  12. By: Jüßen, Falko; Bayer, Christian
    Abstract: We reassess the empirical effects of income and employment on self-reported well-being. Our analysis makes use of a two-step estimation procedure that allows applying instrumental variable regressions with ordinal observable data. As suggested by the theory of incomplete markets, we differentiate between the effects of persistent and transitory income shocks. In line with this theory, we find that persistent shocks have a significant impact on happiness while transitory shocks do not. This has consequences also for inference about the happiness effect of employment. We find that employment per se is rather associated with a decline in happiness. --
    JEL: E21 D12 D60
    Date: 2013
  13. By: Pfaff, Tobias; Hirata, Johannes
    Abstract: Recent studies focused on testing the Easterlin hypothesis (happiness and national income correlate in the cross-section but not over time) on a global level. We make a case for testing the Easterlin hypothesis at the country level where individual panel data allow exploiting important methodological advantages. Novelties of our test of the Easterlin hypothesis are a) long-term panel data and estimation with individual fixed effects, b) regional GDP per capita with a higher variation than national figures, c) accounting for potentially biased clustered standard errors when the number of clusters is small. Using long-term panel data for Germany and the United Kingdom, we do not find robust evidence for a relationship between GDP per capita and life satisfaction in either country (controlling for a variety of variables). Together with the evidence presented in Stevenson and Wolfers (2008, BROOKINGS PAP ECO AC), we now count three exceptions supporting Easterlin s happiness-income hypothesis: the United States, Germany, and the United Kingdom. --
    JEL: C23 I31 O40
    Date: 2013
  14. By: Grunow, Martina
    Abstract: This paper provides an empirical analysis of reference-dependent effects of unemployment on mental health. I show that the negative effect of unemployment on mental health depends on expectations about the future employment status. Several contributions to the literature have shown that the perception of the individual employment status depends on the surrounding unemployment rate. We argue that expectations are a possible link between unemployment rates and the individual employment status regarding changes in mental health. Theoretical foundation comes from models for reference-dependent preferences with endogenous reference points. We provide a simple theoretical model to motivate and structure the empirical analysis. Using data from the German Socio-Economic Panel, we estimate a pairwise interacted model for employment status and expectations over two time periods. Life satisfaction is used as a proxy for mental health. To identify a causal effect of unemployment, expectations and their interactions on mental health, the analysis relies on fixed effects and exogenous entries into unemployment due to plant closures. We confirm the standard result that unemployment has a negative effect on mental health. Furthermore, the results deliver empirical evidence for reference-dependent effects of unemployment on mental health. We find that becoming unemployed unexpectedly has a more severe negative effect on mental health as if the unemployment was expected. Therefore, this paper contributes to the understanding of how mental health is affected by unemployment and delivers empirical support for the theoretical models of reference-dependent utility. --
    JEL: C23 I10 D03
    Date: 2013
  15. By: Koch, Christian
    Abstract: Why do some people behave pro-socially while others do not? Using an experimental design based on Konow and Earley (JPubE, 2008), I investigate a reason already proposed by Aristotle in his Nicomachean Ethics: He claims that there is a nexus between virtues and well-being and that enduring well-being cannot be achieved by hedonic pleasures and material affluence, but only by virtuous behavior. In order to analyze this hypothesis, I use a within-subject design. Initially, participants answer an elaborated well-being questionnaire and then play six different cooperation games. I examine two questions in connection with the Aristotelian idea: First, do more virtuously behaving subjects report on average higher well-being? Second, if the answer is affirmative, what is the underlying causal relationship? I find a favorable correlation between well-being and virtuous behavior and examine different hypotheses about what leads to virtuous behavior: My experimental data is mostly in line with the hypothesis that virtuous behavior is both a long-run cause as well as a short effect of a specific type of long-run well-being, called eudaimonic well-being. To this extent, I find evidence in favor of a nexus between virtues and well-being. --
    JEL: C91 D64 D03
    Date: 2013

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