nep-hap New Economics Papers
on Economics of Happiness
Issue of 2015‒02‒11
seventeen papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. The impact of the assimilation of migrants on the well-being of native inhabitants: A theory By Stark, Oded; Bielawski, Jakub; Jakubek, Marcin
  2. Do temporary agency workers affect workplace performance? By Alex Bryson
  3. Positive employee attitudes: how much human resource management do you need? By Michael White; Alex Bryson
  4. Money, well-being and loss aversion: does an income loss have a greater effect on well-being than an equivalent income gain? By James Banks; Gordon D.A. Brown; Christopher J. Boyce; Alex M. Wood; Andrew E. Clark
  5. Social comparisons, health and well-being By Andrew E. Clark
  6. Crime scars: recessions and the making of career criminals By Brian Bell; Anna Bindler; Stephen Machin
  7. Assessing the effect of school days and absences on test score performance By Esteban Aucejo; Teresa Romano
  8. Do women earn less even as social entrepreneurs? By Saul Estrin; Ute Stephan; Sunčica Vujić
  9. Anthropometric dividends of Czechoslovakia’s break up By Joan Costa-Font; Lucia Kossarova
  10. Gone with the Storm: Rainfall Shocks and Household Well-Being in Guatemala By Baez, Javier E.; Lucchetti, Leonardo; Genoni, Maria Eugenia; Salazar, Mateo
  11. Ready for boarding? The effects of a boarding school for disadvantaged students By Behaghel, Luc; de Chaisemartin, Clement; Gurgand, Marc
  12. Relative income position and happiness: are cabinet supporters different from others in Japan? By Eiji Yamamura; Yoshiro Tsutsui; Fumio Ohtake
  13. L’indice de richesse inclusive : l’économie Mainstream au-delà de ses limites, mais en deçà de la soutenabilité ? By Géraldine THIRY; Philippe ROMAN
  14. The American Pride and Aspiration By Santra, Sattwik; Chaudhury, Ranajoy
  15. Integrating Human Capital and Human Capabilities in Understanding the Value of Education By Chiappero-Martinetti, Enrica; Sabadash, Anna
  16. Happiness Before and After an Election: An Analysis Based on a Daily Survey around Japan's 2009 Election By Yusuke Kinari; Fumio Ohtake; Miles Kimball; Shoko Morimoto; Yoshiro Tsutsui
  17. Socioeconomic inequalities in subjective well-being among the 50+: contributions of income and health By France Weaver; Judite Goncalves; Valerie-Anne Ryser

  1. By: Stark, Oded; Bielawski, Jakub; Jakubek, Marcin
    Abstract: We present a theory that systematically and causally links the well-being of native inhabitants with variation in the extent of the assimilation of migrants. Recent empirical findings are yielded as predictions of the theory.
    Keywords: Migrants’ assimilation, The well-being of native inhabitants, Food Security and Poverty, I31, J61,
    Date: 2015–01
  2. By: Alex Bryson
    Abstract: Using nationally representative workplace data we find the use of temporary agency workers (TAW) is positively associated with financial performance in the British private sector and weakly associated with higher sales per employee. However TAW is not associated with value added per employee. Employees in workplaces with TAW receive higher wages than observationally equivalent employees in non-TAW workplaces. But the presence of TAW in the employee’s occupation is associated with lower wages for employees in that occupation. Furthermore, conditioning on wages, the presence of TAW at the workplace is associated with lower job satisfaction and higher job anxiety among employees. These findings are consistent with TAW having an adverse effect on employees’ experiences at work, perhaps due a more labour intensive regime, one which is only partly compensated for with higher wages.
    Keywords: temporary agency workers; labour productivity; financial performance; worker wellbeing
    JEL: J50 L22 L23 L24
    Date: 2013–04
  3. By: Michael White; Alex Bryson
    Abstract: We propose a selective view of human resource management (HRM) that is guided by work motivation theory, arguing that one of the means by which firms achieve higher performance is by investing in certain forms of HRM practice that help fulfil intrinsic work values and thereby influence employees’ attitudes to their jobs and to the firm in a positive direction. Additionally, an accumulation of complementary practices has important communicative functions that intensify positive employee attitudes. Using nationally representative linked employer–employee data for Britain, we investigate the strength and form of the association between the array of practices deployed by the workplace on one hand, and organizational commitment (OC) and intrinsic job satisfaction (IJS) on the other – two types of job attitude that research has shown to be related to a range of performance measures. We find strong evidence that the relationship between employee job attitudes and our measure of HRM is non-linear, rising chiefly at higher levels of HRM. Results are robust to altered composition of the HRM index. Higher OC and IJS emerge at HRM intensity values which are attained by roughly half the British population of workplaces.
    Keywords: human resource management; high performance; organizational commitment; intrinsic job satisfaction
    JEL: J28 L23 M12 M54
    Date: 2013–03–23
  4. By: James Banks; Gordon D.A. Brown; Christopher J. Boyce; Alex M. Wood; Andrew E. Clark
    Abstract: Higher income is associated with greater well-being, but do income gains and losses impact on well-being differently? Loss aversion, whereby losses loom larger than gains, is typically examined with relation to decisions about anticipated outcomes. Here, using subjective well-being data from Germany (N = 28,723) and the UK (N = 20,570), we find that experienced falls in income have a larger impact on well-being than equivalent income gains. The effect is not explained by the diminishing returns to well-being of income. Our findings show that loss aversion applies to experienced losses, counteracting suggestions that loss aversion is only an affective forecasting error. Longitudinal studies of the income/well-being relationship may, by failing to take account of loss aversion, have overestimated the positive effect of income for well-being. Moreover, societal well-being may be best served by small and stable income increases even if such stability impairs long-term growth.
    Keywords: loss aversion; money; income; subjective well-being
    JEL: J1
    Date: 2014–01
  5. By: Andrew E. Clark
    Abstract: Health and well-being are socially determined. One of the ways in which this comes about is via social comparisons with other individuals in the same personal, geographic or social networks, with the comparisons referring either to income or other aspects of economic and social life. The existence of such comparison effects with respect to income may help to explain the social gradient in health.
    Keywords: well-being; comparisons; income; unemployment; divorce; religion; social health gradient
    JEL: N0
    Date: 2013–08
  6. By: Brian Bell; Anna Bindler; Stephen Machin
    Abstract: Recessions lead to short-term job loss, lower levels of happiness and decreasing income levels. There is growing evidence that workers who first join the labour market during economic downturns suffer from poor job matches that have a sustained detrimental effect on their wages and career progression. This paper uses a range of US and UK data to document a more disturbing long-run effect of recessions: young people who leave school in the midst of recessions are significantly more likely to lead a life of crime than those graduating into a buoyant labour market. These effects are long lasting and substantial.
    Keywords: Crime; recessions; unemployment
    JEL: J64 K42
    Date: 2014–07
  7. By: Esteban Aucejo; Teresa Romano
    Abstract: While instructional time is viewed as crucial to learning, little is known about the effectiveness of reducing absences relative to increasing the number of school days. In this regard, this paper jointly estimates the effect of absences and length of the school calendar on test score performance. Using administrative data from North Carolina public schools, we exploit a state policy that provides variation in the number of days prior to standardized testing and find substantial differences between these effects. Extending the school calendar by ten days increases math and reading test scores by only 0.8% and 0.2% of a standard deviation, respectively; a similar reduction in absences would lead to gains of 5.8% and 3% in math and reading. We perform a number of robustness checks including utilizing u data to instrument for absences, family-year fixed effects, separating excused and unexcused absences, and controlling for a contemporaneous measure of student disengagement. Our results are robust to these alternative specifications. In addition, our findings indicate considerable heterogeneity across student ability, suggesting that targeting absenteeism among low performing students could aid in narrowing current gaps in performance.
    Keywords: Economic growth; business cycles; subjective well-being; loss aversion
    JEL: I20
    Date: 2014–09
  8. By: Saul Estrin; Ute Stephan; Sunčica Vujić
    Abstract: Based upon unique survey data collected using respondent driven sampling methods, we investigate whether there is a gender pay gap among social entrepreneurs in the UK. We find that women as social entrepreneurs earn 29% less than their male colleagues, above the average UK gender pay gap of 19%. We estimate the adjusted pay gap to be about 23% after controlling for a range of demographic, human capital and job characteristics, as well as personal preferences and values. These differences are hard to explain by discrimination since these CEOs set their own pay. Income may not be the only aim in an entrepreneurial career, so we also look at job satisfaction to proxy for nonmonetary returns. We find female social entrepreneurs to be more satisfied with their job as a CEO of a social enterprise than their male counterparts. This result holds even when we control for the salary generated through the social enterprise. Our results extend research in labour economics on the gender pay gap as well as entrepreneurship research on women’s entrepreneurship to the novel context of social enterprise. It provides the first evidence for a “contented female social entrepreneur” paradox.
    Keywords: Social entrepreneur; gender pay gap; social enterprise; earnings; job satisfaction
    JEL: J28 J31 J71 L32
    Date: 2014–11
  9. By: Joan Costa-Font; Lucia Kossarova
    Abstract: Processes of transition to democracy and country break up stand out as ideal experiments to estimate the impact of wide institutional reform on well-being. Changes in population heights are regarded as virtuous pointers of well-being improvements in psycho-social environments, which improve with democracy. We analyzed a unique dataset containing individual heights in the Czech Republic and Slovakia to measure the retrospective well-being effects of the two transitions to liberal democracy and capitalism after the split up of Czechoslovakia. An additional year spent under democracy increases height by 0.286cm for Slovaks and 0.148cm for Czechs. Although transition paths differ across the two countries, the absolute height gap between Slovaks and the Czechs did not change. Slovaks benefited more than the Czechs in the bottom and mid tercile.
    Keywords: height; democracy; transition; secession; Czechoslovakia; Blinder-Oaxaca decomposition; height dimorphism
    JEL: O52
    Date: 2014–11
  10. By: Baez, Javier E. (World Bank); Lucchetti, Leonardo (World Bank); Genoni, Maria Eugenia (World Bank); Salazar, Mateo (World Bank)
    Abstract: This paper investigates the causal consequences of Tropical Storm Agatha (2010) – the strongest tropical storm ever to strike Guatemala since rainfall records have been kept – on household welfare. The analysis reveals substantial negative effects, particularly among urban households. Per capita consumption fell by 12.6%, raising poverty by 5.5 percentage points (an increase of 18%). The negative effects of the shock span other areas of human welfare. Households cut back on food consumption (10% or 43 to 108 fewer calories per person per day) and reduced expenditures on basic durables. These effects are related to a drop in income per capita (10%), mostly among salaried workers. Adults coped with the shock by increasing their labor supply (on the intensive margin) and simultaneously relying on the labor supply of their children and withdrawing them from school. Impact heterogeneity is associated with the intensity of the shock, food price inflation, and the timing of Agatha with respect to the harvest cycle of the main crops. The results are robust to placebo treatments, household migration, issues of measurement error, and different samples. The negative effects of the storm partly explain the increase in poverty seen in urban Guatemala between 2006 and 2011, which national authorities and analysts previously attributed solely to the collateral effects of the global financial crisis.
    Keywords: economic development, natural disasters, consumption, poverty, human capital
    JEL: I3 J2 O1
    Date: 2015–01
  11. By: Behaghel, Luc (Paris School of Economics - INRA); de Chaisemartin, Clement (Department of Economics, University of Warwick); Gurgand, Marc (Paris School of Economics - CNRS)
    Abstract: Boarding schools substitute school to home, but little is known on the effects this substitution produces on students. We present results of an experiment in which seats in a boarding school for disadvantaged students were randomly allocated. Boarders enjoy better studying conditions than control students. However, they start outperforming control students in mathematics only two years after admission, and this effect mostly comes from strong students. After one year, levels of well-being are lower among boarders, but in their second year, students adjust: well-being catches-up. This suggests that substituting school to home is disruptive: only strong students benefit from the boarding school, once they have managed to adapt to their new environment. JEL classification: I21 ; I28 ; J24 ; H52
    Keywords: boarding school ; cognitive skills ; non-cognitive skills ; randomized controlled trial ; heterogeneous effects
    Date: 2015
  12. By: Eiji Yamamura; Yoshiro Tsutsui; Fumio Ohtake
    Abstract: During the period of 2001-2006, the Liberal Democratic Party (LDP) adopted a market-oriented policy under the Koizumi cabinet. In 2006, following the formation of the first Abe cabinet, the LDP returned to a traditional redistributive policy. We assume that the supporters of the Koizumi cabinet had an expectation of upward income mobility via the market. On this assumption, using data covering the Koizumi and first Abe cabinets, this paper attempts to examine whether the effects of relative income differ between supporters and non-supporters of the Koizumi cabinet. Key findings are as follows: within the Koizumi cabinet period, a relatively low-income position is negatively related to happiness for non-LDP supporters but not for LDP supporters. However, under the period of the first Abe cabinet, the difference in the effect of relative income for LDP supporters and others disappears. These results imply that an expectation of market outcomes leads to a difference in the effect of relative income position on happiness levels. Namely, during the Koizumi cabinet period, low-income supporters believed that their income position would improve under Koizumifs market-oriented policy, and during the Abe cabinet period, low-income LDP supporters, like non-supporters, did not hold such an optimistic view.
    Date: 2015–01
  13. By: Géraldine THIRY (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Philippe ROMAN (Université de Versailles Saint-Quentin-en-Yvelines, Centre International REEDS)
    Abstract: L'Indice de richesse inclusive est issu de la théorie économique standard de la soutenabilité, entendue comme préservation d'une somme pondérée de capitaux censés contribuer au bien-être intergénérationnel. Cet indicateur semble voué à occuper une place importante dans la poursuite d'un développement soutenable, notamment dans les pays en développement. Si l'indicateur séduit par son élégance et sa portée, il n'en pose pas moins des problèmes méthodologiques, épistémologiques et politiques majeurs. Nous proposons une analyse critique de l'indicateur et du cadre théorique sur lequel il s'appuie, en mettant l'accent sur l'économicisme qui le caractérise sous les dehors d'une théorie rénovée et débarrassée de ses oripeaux néoclassiques les plus injustifiables. The Inclusive Wealth Index (IWI) is built upon mainstream sustainability economics, where sustainability is defined as a weighted sum of capital assets according to their supposed contribution to intergenerational wellbeing. The IWI will likely play an important role in the pursuit of sustainable development. While the IWI's elegance and scope are attractive features, major methodological, epistemological and political problems remain. We critically assess the indicator and its underlying theoretical framework. We specifically address the economism of a framework that seems relieved of its most unwarranted neoclassical assumptions.
    Keywords: indicateurs de soutenabilité, indicateur de richesse inclusive, économie écologique, économicisme,nouvelle économie des ressources sustainability indicators, inclusive wealth index, ecological economics, economism, new resource economics
  14. By: Santra, Sattwik; Chaudhury, Ranajoy
    Abstract: There has been a growing literature on empirical studies on status consciousness. Specifically, the predictions of signaling models and theory of subjective well-being are empirically tested and found to support status seeking behavior. Instead of relying on these established theoretical models on status seeking behavior, we adopt a very general approach and model how individuals’ status seeking behavior influences their consumption patterns. We define both an aspiration aspect and a pride aspect of status. Individuals aspire to reach higher status which we call aspiration aspect of status. Individuals also try their best to maintain at least their current status with respect to relatively lower income group class, which we call the pride aspect of status. We model these two aspects of status for the U.S households using Panel Study of Income Dynamics (PSID) data. Some of the results obtained go against the conventional signaling models which predict that as the mean income of the reference group increases, consumption of conspicuous goods decreases. Also, we get results contrary to Duesenberry’s claim that rich are not concerned about their position relative to lower income group class.
    Keywords: Conspicuous consumption; Status; Household financial allocation;
    JEL: C51 D12
    Date: 2015–01–27
  15. By: Chiappero-Martinetti, Enrica; Sabadash, Anna
    Abstract: The aim of this chapter is to investigate the possibility of combining human capital theory and the capability approach in order to better understand and measure both the instrumental and the intrinsic values of education for individuals, and to trace its relative spillover effects on societies. This chapter discusses a combined human capital - capability approach as a possibility for working with a broader information space in assessing the value of education. It presents three integrated sections discussing the role and value of education for human well-being. The first section reviews the most significant attempts to define and measure education from a human capital (HC) perspective. The second is focussed on education and human capabilities and considers those aspects and empirical facts that are not fully encompassed within or justified by the HC perspective. The third section argues that human capital and the capabilities paradigms can complement each other in measuring the value of education, and discusses some methodological challenges and empirical features associated with this combined view.
    Keywords: education; human capital; capabilties
    JEL: C81 D60 O15
    Date: 2014–07
  16. By: Yusuke Kinari; Fumio Ohtake; Miles Kimball; Shoko Morimoto; Yoshiro Tsutsui
    Abstract: This paper investigates whether the Japanese voters became happy and/or unhappy due to the results of the General Election in 2009. We conducted a daily web survey for seven days before and after the election, obtaining 1068 responses. Estimating a fixed effects model, we found that supporters of the Democratic Party of Japan (DPJ), the winner, became significantly happier, and supporters of the Liberal Democratic Party of Japan (LDP) and New Komeito, the losers, became significantly unhappier on the day following the election. However, happiness returned to the previous level in one or two days, implying people adapted to the news very quickly. Dividing those who support the policies of DPJ into two groups, those who expect material benefits from the victory of DPJ and those who do not, we demonstrated that the reason why the supporters of the winner (DPJ) felt happy was not because they obtained material benefits from the change of government. We also found that the happiness level of those whose expectation of the election results were realized did not change, while that of those whose expectation differed from the reality changed substantially. In a word, only unexpected results matter.
    Date: 2015–01
  17. By: France Weaver; Judite Goncalves; Valerie-Anne Ryser
    Abstract: Although there is a growing interest in subjective well-being (SWB) and its determinants, the extent of socioeconomic inequalities in SWB has not yet been analyzed. This study assesses socioeconomic inequalities in SWB in twelve European countries and the United States (US), by estimating concentration indices. They are then decomposed to document how individual income, relative income (i.e. how individual income compares to those of peers), individual health, and relative health contribute to these inequalities. The analysis focuses on the population aged 50 and over, using data from the ‘Survey of Health, Ageing, and Retirement in Europe’ and the ‘Health and Retirement Study’ for the US. All countries display some socioeconomic inequalities in SWB, with SWB being concentrated among individuals with higher socioeconomic status. Of the countries studied, the Netherlands and Belgium have the lowest socioeconomic inequalities in SWB, while Poland and the Czech Republic have the highest. The US has significantly higher inequalities than the former and significantly lower inequalities than the latter countries. The decomposition reveals that individual and relative health contribute largely to these inequalities in all countries. In contrast, individual and relative income matter in some countries, such as the US, and not in others, for example Spain. These results indicate that attention needs to be paid to socioeconomic inequalities in SWB of the baby boomers and elderly population and that, in most countries, policies focusing on health would be more effective at reducing them than targeting income.
    Keywords: Socioeconomic inequalities, subjective well-being, income, health
    Date: 2015–01

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