nep-hap New Economics Papers
on Economics of Happiness
Issue of 2016‒02‒17
eleven papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Does Joining the EU Make You Happy? Evidence from Bulgaria and Romania By Nikolova, Milena; Nikolaev, Boris
  2. The Dynamic Effect of Disability on Work and Subjective Wellbeing in Australia By Jones, Melanie; Mavromaras, Kostas G.; Sloane, Peter J.; Wei, Zhang
  3. Subjective Well-being in China, 2005-2010: The Role of Relative Income, Gender and Location By Asadullah, Niaz; Xiao, Saizi; Yeoh, Emile Kok-Kheng
  4. Paradox Lost? By Easterlin, Richard A.
  5. Top Incomes and Human Well-being Around the World By Burkhauser, Richard V.; De Neve, Jan-Emmanuel; Powdthavee, Nattavudh
  6. The Protestant Fiscal Ethic: Religious Confession and Euro Skepticism in Germany By Krapf, Matthias; Chadi, Adrian
  7. A Glance into the Tunnel: Experimental Evidence of Expectations Versus Comparison Considerations By Lang, Harald; Konrad, Kai A.; Morath, Florian
  8. Effects of Early Childhood Intervention on Maternal Employment, Fertility and Well-Being: Evidence from a Randomized Controlled Trial By Sandner, Malte
  9. Career, Private Life, and Well-Being among College-educated West German Women By Schaubert, Marianna
  10. Hurricane Risk, Happiness and Life Satisfaction. Some Empirical Evidence on the Indirect Effects of Natural Disasters By Berlemann, Michael
  11. The Ranking Measure of Life Satisfaction: A Constructive Critique By Köke, Sonja; Perino, Grischa

  1. By: Nikolova, Milena (IZA); Nikolaev, Boris (Emory University)
    Abstract: We examine the effect of joining the European Union on individual life satisfaction in Bulgaria and Romania in the context of the 2007 EU enlargement. Although EU membership is among the most important events in Bulgaria and Romania's modern histories, there is no evidence on how it affected the subjective well-being of ordinary people in the two countries. Using a difference-in-differences strategy and Eurobarometer data, we provide the first evidence that joining the EU increased average life satisfaction in Bulgaria and had a positive but statistically insignificant effect in Romania. One explanation is that trust towards the EU increased only in Bulgaria but not in Romania after both countries joined in 2007. Furthermore, Romania's political war of 2007 may have mired the country's positive life satisfaction experiences related to EU membership. We also show that the younger, the employed, and those with a high-school education were the winners from EU integration. Our results are robust to two placebo tests, in which we use two fake entry dates to the EU, and to an estimation using bootstrapped standard errors. Our findings have implications for EU integration policy and future enlargements.
    Keywords: subjective well-being, happiness, transition economies, EU enlargement, difference-in-differences, European Union
    JEL: I31 I39 P20
    Date: 2016–01
  2. By: Jones, Melanie (Cardiff University); Mavromaras, Kostas G. (NILS, Flinders University); Sloane, Peter J. (Swansea University); Wei, Zhang (NILS, Flinders University)
    Abstract: Using longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey (2001-2013) we examine the relationship between the dynamics of work-limiting disability and employment, hours of work, earnings and life satisfaction. We employ two alternative classifications of the dynamic trajectories of disability and, in doing so, are able to explicitly consider the influence of disability exit in addition to examining onset by chronicity and severity. After controlling for unobserved individual heterogeneity, we find that the positive impact of disability exit is smaller in magnitude and shorter-lived than the negative impact of onset. Further, while individuals are found to recover from a one period disability within three years, there is no sign of adaptation even after ten years for those whose disability is chronic, defined as evident for three or more years post-onset, and severe.
    Keywords: disability, employment, hours of work, earnings, life satisfaction, HILDA
    JEL: I10 J2 J31 J71
    Date: 2015–12
  3. By: Asadullah, Niaz (University of Malaya); Xiao, Saizi (University of Malaya); Yeoh, Emile Kok-Kheng (University of Malaya)
    Abstract: We use data from two rounds of the Chinese General Social Survey (CGSS) to study the determinants of subjective well-being in China over the period 2005-2010 during which self-reported happiness scores show an increase across all income groups. Ordered probit regression analysis of well-being reveals large influence of gender, rural residency and household income. After controlling for demographic attributes, health, unemployment status, household size, agricultural hukou (household registration identity) and education status, household assets, the influence of past and future income and province dummies, we find that women, urban residents and people with higher income are happier in China. More schooling, better health and being employed are positively and significantly correlated with well-being. Sub-sample s reveals that the rich only care about relative income whereas the effect of absolute income dominates in case of the poorer section. The influence of absolute income is larger among women compared to men and in turn explains why women, despite being poorer, are happier in China, conditional on socio-economic differences. On the other hand, rural residents are poorer than urban residents so that conditional on having the same income, there is no rural-urban happiness gap. Our results suggest that while further decline in poverty will enhance well-being in China, policies that reduce rural-urban and gender inequalities are also likely to boost well-being.
    Keywords: gender, happiness, inequality, poverty, unemployment, well-being
    JEL: O12 I30 I31
    Date: 2016–01
  4. By: Easterlin, Richard A. (University of Southern California)
    Abstract: Or Paradox Regained? The answer is Paradox Regained. New data confirm that for countries worldwide long-term trends in happiness and real GDP per capita are not significantly positively related. The principal reason that Paradox critics reach a different conclusion, aside from problems of data comparability, is that they do not focus on identifying long-term trends in happiness. For some countries their estimated growth rates of happiness and GDP are not trend rates, but those observed in cyclical expansion or contraction. Mixing these short-term with long-term growth rates shifts a happiness-GDP regression from a horizontal to positive slope.
    Keywords: Easterlin Paradox, economic growth, income, happiness, life satisfaction, subjective well-being, transition countries, less developed nations, developed countries, long-term, short-term, trends, fluctuations
    JEL: I31 D60 O10 O5
    Date: 2016–01
  5. By: Burkhauser, Richard V. (Cornell University); De Neve, Jan-Emmanuel (University of Oxford); Powdthavee, Nattavudh (London School of Economics)
    Abstract: The share of income held by the top 1 percent in many countries around the world has been rising persistently over the last 30 years. But we continue to know little about how the rising top income shares affect human well-being. This study combines the latest data to examine the relationship between top income share and different dimensions of subjective well-being. We find top income shares to be significantly correlated with lower life evaluation and higher levels of negative emotional well-being, but not positive emotional well-being. The results are robust to household income, individual's socio-economic status, and macroeconomic environment controls.
    Keywords: top income, life evaluation, well-being, income inequality, World Top Income Database, Gallup World Poll
    JEL: D63 I3
    Date: 2016–01
  6. By: Krapf, Matthias; Chadi, Adrian
    Abstract: During the European sovereign debt crisis, most countries that ran into fiscal trouble had Catholic majorities, whereas countries with Protestant majorities were able to avoid fiscal problems. Survey data show that, within Germany, views on the euro crisis differ between Protestants and Non-Protestants, too. Concerns about the euro crisis have increased among Protestants during the crisis, and significantly reduce their subjective wellbeing only. We use the timing of survey interviews and news events in 2011 to account for the endogeneity of euro concerns. Emphasis on moral hazard concerns in Protestant theology may, thus, still shape economic preferences.
    JEL: Z10 I31 E00
    Date: 2015
  7. By: Lang, Harald; Konrad, Kai A.; Morath, Florian
    Abstract: Learning that others earn more may reduce individual well-being but can also be informative about the own income prospects. This paper provides experimental evidence that separates direct effects of income comparisons on well-being and informational effects from observing changes in the income of others. In an environment of uncertainty about the own income we find that both the direct comparison effects and the informational effects are asymmetric. Individual beliefs about the own income are adjusted downwards when observing that others are likely to earn less but do not change significantly when observing that others are likely to earn more. Individual satisfaction decreases when observing that others are likely to earn more but does not change significantly when observing that others are likely to earn less. Overall, individuals are more reactive to bad news than to good news .
    JEL: C91 D31 D84
    Date: 2015
  8. By: Sandner, Malte
    Abstract: This paper presents the results of a randomized study of a home visiting program implemented in Germany for first-time mothers on welfare. A major goal of the program is to increase the participants economic self-sufficiency. I use administrative data from the Federal Employment Agency and detailed telephone surveys to examine the effects of the intervention. The findings reveal that the intervention does not affect maternal employment or school attendance but unintentionally increases subsequent births. The program s effect on fertility can be explained by higher maternal life satisfaction and well-being in the treatment group which led to fewer abortions compared with the control group. These results are in contrast to those of previous studies from the United States, where home visiting programs increased employment and decreased fertility.
    JEL: J13 J12 J18
    Date: 2015
  9. By: Schaubert, Marianna
    Abstract: This paper is about the compatibility of a career and a private life among collegeeducatedWest German women. More precisely, it explicitly investigates the degree to which the concurrence of career and cohabitation or motherhood can affect women’s well-being. I attempt to overcome the difficulties associated with estimating this causal relationship by using fixed-effects models. Thus, I exploit the variation over time for each individual woman in order to estimate the interaction effect of career and private life on life satisfaction. The results suggest that only a small fraction of women achieve career and cohabitation or motherhood simultaneously. In addition, this proportion remains small across the younger birth cohorts of college-educated females. More importantly, the estimates do not show greater life-satisfaction gain for those women who have both – a career and a private life. To the best of my knowledge, no previous study has examined this link between career and cohabitation or motherhood for female graduates in Germany.
    JEL: D19 J17 J19
    Date: 2015
  10. By: Berlemann, Michael
    Abstract: As a consequence of climate change, certain types of natural disasters become either more likely or more severe. While disasters might have numerous direct (typically negative) e ects, the e ect of an increase of natural disaster risk on individual well-being is often neglected. In this paper we study the e ects of natural disaster risk on self-reported happiness and life satisfaction at the example of tropical storms. Combining several waves of the World Values Survey and appropriate storm data we find that disaster risk tends to have little systematic e ect on self-reported happiness, once we correct for individual characteristics. However, hurricane risk turns out to decrease life satisfaction significantly. We conclude that when individuals evaluate their long-term satisfaction with their life, disaster risk is perceived as threat to individual well-being.
    JEL: I31 Q54 Q51
    Date: 2015
  11. By: Köke, Sonja; Perino, Grischa
    Abstract: Life satisfaction (LS) is used as a welfare-measure in many different ways to inform about what makes people better off and even to quantify tradeoffs between different things like putting a monetary value on environmental goods. All these welfare analyzes rely on the ability of the measurement method to reliably identify preference (or satisfaction) rankings. We demonstrate a potential and systematic identification failure of the currently used measurement method (level measure), which asks people to state their LS level on a bounded and discrete scale. We then propose a new measurement method (the ranking measure), which directly asks the individual to give a preference ranking of the current situation against a past situation. This ranking measure will allow us to test the ability of the level measure to capture preference rankings of two consecutively experienced situations. First results from a similar measure in the German Socio-Economic Panel from the years 1984-87 suggest that there is a systematic bias between the two measures. Our ranking measure will be included in the GESIS Panel in February this year. It will include not only general LS but also satisfaction with specific areas of life. With this paper we contribute to a better understanding of life satisfaction measures and the nature of their measurement biases by formally connecting the measurement method with a theoretical welfare concept and by then testing the derived hypotheses empirically with survey data.
    JEL: I30 I31 I39
    Date: 2015

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