nep-hap New Economics Papers
on Economics of Happiness
Issue of 2014‒06‒14
ten papers chosen by
Viviana Di Giovinazzo
University of Milano-Bicocca

  1. Not So Dissatisfied After All? The Impact of Union Coverage on Job Satisfaction By Alex Bryson; Michael White
  2. Can Interaction be the Primary Focus of In-group Biases? By David Johnson; Robert Oxoby
  3. Mental Well-being of the Bereaved and Labor Market Outcomes By Atsuko Tanaka; Laurel Beck
  4. The Impact of Parents Migration on the Well-being of Children Left Behind: Initial Evidence from Romania By Botezat, Alina; Pfeiffer, Friedhelm
  5. Are Public Sector Workers Different? Cross-European Evidence from Elderly Workers and Retirees By Tonin, Mirco; Vlassopoulos, Michael
  6. The Long-Run Consequences of Chernobyl: Evidence on Subjective Well-Being, Mental Health and Welfare By Danzer, Alexander M.; Danzer, Natalia
  7. International Environmental Agreements among Heterogeneous Countries with Social Preferences By Charles D. Kolstad
  8. Online networks and subjective well-being By Sabatini, Fabio; Sarracino, Francesco
  9. Reduction of income inequality and subjective well-being in Europe By Hajdu, Tamás; Hajdu, Gábor
  10. A policy response to a downside of the integration of economies: An impossibility theorem By Stark, Oded

  1. By: Alex Bryson; Michael White
    Abstract: The links between unionisation and job satisfaction remain controversial. In keeping with the existing literature we find strong statistically significant negative correlations between unionisation and overall job satisfaction. However, in contrast to the previous literature we find that once one accounts for fixed unobservable differences between covered and uncovered employees, union coverage is positively and significantly associated with satisfaction with pay and hours of work. Failure to account for fixed unobservable differences between covered and uncovered employees leads to a systematic underestimate of the positive effects of coverage on job satisfaction for both union members and non-members. It seems union coverage has a positive impact on job satisfaction that is plausibly causal.
    Keywords: Unions, union coverage, union membership, job satisfaction
    JEL: C35 J28 J51
    Date: 2014–06
  2. By: David Johnson (University of Calgary); Robert Oxoby (University of Calgary)
    Abstract: Previous work on group identity in economics has demonstrated behavior consistent with in-group favoritism: individuals are more generous to members of their own group in comparison to members of other groups. We present an experiment in which we seek to identify if in-group favoritism is driven by a desire to be more generous to in-group members or rather eschew interacting with out-group members. Our results demonstrate that individuals do not necessarily behave differently when interacting with in-group or out-group members in a simple ultimatum game. Rather, many individuals are willing to incur a cost to ensure interacting with an in-group member. Surprisingly this discrimination does not result in larger ultimatum game offers, but results in increased levels of reported happiness with resultant outcomes.
    Keywords: experiments, identity, happiness
    JEL: C9 D1 M5
    Date: 2014–05–29
  3. By: Atsuko Tanaka (University of Calgary); Laurel Beck
    Abstract: This paper examines how grief caused by the death of an immediate family member affects labor force outcomes through adverse changes to mental health. We differentiate mental health conditions from personality by exploiting two panel data sets---the Health and Retirement Study (HRS) and the Japanese Panel Survey of Consumers (JPSC)---to compare two demographic groups: elderly Americans and young Japanese women. In order to understand the causal effects of mental status on labor force outcomes, we use death of a respondent's parents or children of respondents as an instrumental variable for symptoms of anxiety or depression, and assess the impact of these events over time. We apply factor analysis and find that there is a single, underlying factor of mental well-being for both demographic groups. We also find that grief has long-term impacts on labor market outcomes for elderly Americans, but that the results are insignificant for young Japanese women.
    Date: 2014–05–28
  4. By: Botezat, Alina (Romanian Academy); Pfeiffer, Friedhelm (ZEW Mannheim)
    Abstract: Many children grow up with parents working abroad. Economists are interested in the achievement and well-being of these "home alone" children to better understand the positive and negative aspects of migration in the sending countries. This paper examines the causal effects of parents' migration on their children left home in Romania, a country where increasingly more children are left behind in recent years. Using samples from a unique representative survey carried out in 2007 instrumental variable and bivariate probit estimates have been performed. Our initial evidence demonstrates that in Romania home alone children receive higher school grades, partly because they increase their time allocation for studying. However, they are more likely to be depressed and more often suffer from health problems especially in rural areas.
    Keywords: parent migration, home alone children, well-being, Romania
    JEL: I12 I21 J13
    Date: 2014–05
  5. By: Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton)
    Abstract: The public sector employs a large share of the labor force to execute important functions (e.g. regulation and public good provision) in an environment beset by severe agency problems. Attracting workers who are motivated to serve the public interest is important to mitigate these problems. We investigate whether public and private sector employees differ in terms of their public service motivation, as measured by their propensity to volunteer, using a representative sample of elderly workers from 12 European countries. To overcome potential identification difficulties related to unobservable differences in working conditions (e.g. working time, required effort, job security, career incentives), we also look at retired workers. We find that public sector workers, both those currently employed and those already retired, are significantly more prosocial; however, the difference in prosociality is explained by differences in the composition of the workforce across the two sectors, in terms of (former) workers' education and occupation. Looking across industries and within occupations, we find that former public sector workers in education are more motivated, while there are no differences across the two sectors when considering broad occupational categories. We also investigate other dimensions and find no differences in terms of trust, while there is evidence of some differences in risk aversion, political preferences, life and job satisfaction.
    Keywords: public sector, public service motivation, risk aversion, trust, life satisfaction, volunteering
    JEL: D64 H83 J45
    Date: 2014–06
  6. By: Danzer, Alexander M.; Danzer, Natalia
    Abstract: This paper assesses the long-run toll taken by a large-scale technological disaster on welfare, well-being and mental health. We estimate the causal effect of the 1986 Chernobyl catastrophe after 20 years by linking geographic variation in radioactive fallout to respondents of a nationally representative survey in Ukraine according to their place of residence in 1986. The psychological effects of this nuclear disaster are large and persistent. More affected individuals exhibit poorer subjective well-being, higher depression rates and lower subjective survival probabilities; they rely more on governmental transfers as source of subsistence. We estimate the aggregate annual welfare loss at 6–8% of Ukraine’s GDP highlighting previously ignored externalities of large-scale catastrophes.
    Keywords: Chernobyl; nuclear catastrophe; externality; subjective well-being; mental health; depression; transfer dependency; welfare loss; natural experiment
    JEL: I31 I18 D62 Q51 H12
    Date: 2014–06–10
  7. By: Charles D. Kolstad
    Abstract: Achieving efficiency for many global environmental problems requires voluntary cooperation among sovereign countries due to the public good nature of pollution abatement. The theory of international environmental agreements (IEAs) in economics seeks to understand how cooperation among countries on pollution abatement can be facilitated. However, why cooperation occurs when noncooperation appears to be individually rational has been an issue in economics for at least a half century. The problem is that theory suggests fairly low (even zero) levels of contribution to a public good and high levels of free riding. Experiments and empirical evidence with individuals suggests higher levels of cooperation. This is a major reason for the emergence in the 1990’s and more recently of the literature on social preferences (also known as other-regarding preferences or prosociality) where participants account for their own well-being as well as that of others. This paper bridges the literature on cooperation among countries with the literature on cooperation among individuals. In particular, we introduce social preferences into a model of international environmental agreements. Focusing on Charness-Rabin social preferences, we find these preferences enlarge the set of conditions where cooperation is individually rational though such preferences also reduce the equilibrium size of a IEA for providing abatement. Although stable coalitions are smaller, more abatement may be provided by individual countries outside of a coalition structure. In contrast to much of the literature, we treat the size of agents as heterogeneous. Size of a country does not affect the incentives for forming a coalition but it does affect the aggregate level of abatement, suggesting that coalitions of large countries are more efficient than coalitions of small countries.
    JEL: H40 H41 Q5
    Date: 2014–06
  8. By: Sabatini, Fabio; Sarracino, Francesco
    Abstract: Does Facebook make people lonely and unhappy? Empirical studies have produced conflicting results about the effect of social networking sites (SNS) use on individual welfare. We use a representative sample of the Italian population to investigate how actual and virtual networks of social relationships influence subjective well-being (SWB). We find a significantly negative correlation between online networking and self-reported happiness. We address endogeneity in online networking by exploiting technological characteristics of the pre-existing voice telecommunication infrastructures that exogenously determined the availability of broadband for high-speed Internet. We try to further disentangle the direct effect of SNS use on well-being from the indirect effect possibly caused by the impact of SNS’s on trust and sociability in a SEM analysis. We find that online networking plays a positive role in SWB through its impact on physical interactions. On the other hand, SNS use is associated with lower social trust, which is in turn positively correlated with SWB. The overall effect of networking on individual welfare is significantly negative.
    Keywords: social participation; online networks; Facebook; social trust; social capital; subjective well-being; hate speech; broadband; digital divide.
    JEL: C36 D85 O33 Z1 Z13
    Date: 2014–06–03
  9. By: Hajdu, Tamás; Hajdu, Gábor
    Abstract: Using four waves of the European Social Survey (179,273 individuals from 29 countries) the authors analyze the association of reduction of income inequality (redistribution) with subjective wellbeing. Their results provide evidence that people in Europe are negatively affected by income inequality, whereas reduction of inequality has a positive effect on well-being. Since the authors simultaneously estimate the effects of income inequality and its reduction, their results indicate that not only the outcome (inequality), but also the procedure (redistribution) that leads to the outcome influences subjective well-being. The authors argue that living in a country where taxes and transfers reduce income inequality to a greater extent, the poor may feel more protected, and the rich may also feel more generous, which may result in an emotional benefit for them. It is also possible that well-being is associated not only with actual, but also with perceived inequality. The positive effect of redistribution seems to be stronger for less affluent members of the societies and left-wing oriented individuals. The estimations are different in Eastern and Western Europe: In post-communist countries people appear to be harder hit by inequality, whereas the impact of inequality reduction on well-being is higher in the East than in the West. --
    Keywords: subjective well-being,satisfaction,inequality,redistribution,inequality reduction
    JEL: D63 I31
    Date: 2014
  10. By: Stark, Oded
    Abstract: Recent research shows that the merger of economies increases aggregate stress. This paper shows that there is no income distribution policy which will ensure that the wellbeing of the individuals belonging to merging economies does not fall below their pre-merger level. --
    Keywords: Merger of populations,Revision of social space,Aggregate relative deprivation,Societal stress,Policy response
    JEL: D04 D63 F55 H53 P51
    Date: 2014

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