nep-hap New Economics Papers
on Economics of Happiness
Issue of 2015‒03‒05
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Comparing entrepreneurs, organizational employees, and the double profile: Satisfaction with work-family balance, resources and demands By Katherina Kuschel
  2. Does Retirement Make you Happy? A Simultaneous Equations Approach By Raquel Fonseca Benito; Arie Kapteyn; Jinkook Lee; Gema Zamarro
  3. How Job Changes Affect People's Lives - Evidence from Subjective Well-being Data By Adrian Chadi; Clemens Hetschko
  4. Great expectations. The unintended consequences of educational choices By FERRANTE, FRANCESCO
  5. Gender Identity and Relative Income Within Households By Bertrand, Marianne; Kamenica, Emir; Pan, Jessica

  1. By: Katherina Kuschel (School of Business and Economics, Universidad del Desarrollo)
    Abstract: This study wants to question the increasingly “popular” notion that self-employment represents a solution to conflict between work and family by comparing the levels of satisfaction with work-family balance and subjective well-being among three samples: organizational employees, entrepreneurs, and the double profile. Based in the job demands-resources framework, this study compares job demands, job resources, and key personal resources among the three groups of workers. Results show that entrepreneurs experience higher levels of satisfaction with work-family balance and subjective well-being, and enjoy greater job resources and key personal resources than organizational employees. Particularly, job autonomy, work-family climate and job security (withdrawal chances) were the greater differences. Interestingly, the double profile share more similarities with the employees group than with the entrepreneurs.
    Keywords: entrepreneurs; satisfaction with work family balance; subjective well-being; job resources; job demands
    JEL: M12 M14 L26
    Date: 2014–12
  2. By: Raquel Fonseca Benito; Arie Kapteyn; Jinkook Lee; Gema Zamarro
    Abstract: Continued improvements in life expectancy and fiscal insolvency of public pensions have led to an increase in pension entitlement ages in several countries, but its consequences for subjective well-being are largely unknown. Financial consequences of retirement complicate the estimation of effects of retirement on subjective well-being as financial circumstances may influence subjective well-being, and therefore, the effects of retirement are likely to be confounded by the change in income. At the same time, unobservable determinants of income are probably related with unobservable determinants of subjective wellbeing, making income possibly endogenous if used as control in subjective wellbeing regressions. To address these issues, we estimate a simultaneous model of retirement, income, and subjective well-being while accounting for time effects and unobserved individual effects. Public pension arrangements (replacement rates, eligibility rules for early and full retirement) serve as instrumental variables. We use data from HRS and SHARE for the period 2004-2010. We find that depressive symptoms are negatively related to retirement while life satisfaction is positively related. Remarkably, income does not seem to have a significant effect on depression or life satisfaction. This is in contrast with the correlations in the raw data that show significant relations between income and depression and life satisfaction. This suggests that accounting for the endogeneity of income in equations explaining depression or life satisfaction is important.
    Keywords: Well-being, Retirement, Institutions, Simultaneous Equation Approach,
    JEL: I3 J26
    Date: 2015–02–25
  3. By: Adrian Chadi (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Clemens Hetschko (School of Business and Economics, Freie Universitaet Berlin)
    Abstract: For representative German panel data, we document that voluntary job switching is associated with higher levels of life satisfaction, though only for some time, whereas forced job changes do not affect life satisfaction clearly. Using plant closures as an exogenous trigger of switching to a new employer, we find that job mobility turns out to be harmful for satisfaction with family life. By investigating people’s lives beyond their workplaces, our study complements research on the well-being impact of labour mobility, suggesting some positive welfare effects of flexible labour markets, but also a previously undocumented potential for negative implications.
    Keywords: life satisfaction, satisfaction with family life, job changes, honeymoon-hangover effect, employment protection legislation
    JEL: I31 J28 J61 J63
    Date: 2015–02
    Abstract: Human capital is invariably found to be an important explanatory variable of various proxies of well being (WB), i.e. income, happiness, job and life satisfaction, health status. Nevertheless, to date few systematic efforts have been made to explain its various and interconnected functions. The U-shaped age-SWB relation found in many empirical studies suggest that investigating the pattern of different measures of WB over people’s life cycle may reveal important information and provide useful insights about the main mechanisms connecting human capital and WB. In this paper I contend that there are four of such links. First, human capital improves the skills in decision making in different life domains. Second, it improves the skills and knowledge in doing things and enjoying life. Third, human capital shapes our identity/personality traits and, fourth, by doing so, it fuels our aspirations in different life domains. The first two effects can be expected to improve people’s performance and subjective well being. Building on Ferrante (2009), more ambiguous is the impact of human capital through the joint action of people’s identity and aspirations. In this paper, I explore data drawn from the Survey on Household Income and Wealth (SHIW) conducted by the Bank of Italy (2008), containing rich information on people’s socioeconomic and educational background, educational and skill mismatch in the workplace and various measures of WB such as income, happiness, job satisfaction and health status. The tentative explanations of my empirical findings are: (a) people experience large mismatches in aspirations/expectations early in adult life; (d) the latter mismatches depend on education and are largely confined to the labour market; (c) the curvature of the U-shaped age-happiness relationship depends on the level of education. The suggested interpretation of these results is that education affects both people’s expectations and the way they react to unfulfilled aspirations.
    Keywords: Education, human capital, aspirations, mismatch, satisfaction, well being
    JEL: I21 I31 J24
    Date: 2014
  5. By: Bertrand, Marianne; Kamenica, Emir; Pan, Jessica
    Abstract: We examine causes and consequences of relative income within households. We show the distribution of the share of income earned by the wife exhibits a sharp drop to the right of 1/2, where the wife's income exceeds the husbands income. We argue that this pattern is best explained by gender identity norms, which induce an aversion to a situation where the wife earns more than her husband. We present evidence that this aversion also impacts marriage formation, the wife's labor force participation, the wife's income conditional on working, marriage satisfaction, likelihood of divorce, and the division of home production. Within marriage markets, when a randomly chosen woman becomes more likely to earn more than a randomly chosen man, marriage rates decline. In couples where the wife's potential income is likely to exceed the husband's, the wife is less likely to be in the labor force and earns less than her potential if she does work. In couples where the wife earns more than the husband, the wife spends more time on household chores; moreover, those couples are less satisfied with their marriage and are more likely to divorce. Those patterns hold both cross-sectionally and within couple over time.
    Keywords: gender gap; gender roles; marriage market
    JEL: D10 J12 J16
    Date: 2015–03

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