nep-hap New Economics Papers
on Economics of Happiness
Issue of 2017‒03‒05
three papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Identity conflict: A framework and empirical investigation By Jolian McHardy; Anita Ratcliffe
  2. Subjective Wellbeing and Institutions: The Case of Rural Ethiopia By Tsegay Gebrekidan Tekleselassie
  3. Income Support, (Un-)Employment and Well-Being By Wolf, Tobias; Hetschko, Clemens; Schöb, Ronnie

  1. By: Jolian McHardy (Department of Economics, University of Sheffield); Anita Ratcliffe (Department of Economics, University of Sheffield)
    Abstract: We develop a framework to explore the circumstances under which utility is reduced as individuals try to maintain multiple identities and satisfy the norms of multiple social groups. We label this outcome identity conflict. We show that while identity conflict is always possible, it is not inevitable, even where group norms differ, but also that conflict may arise even where group norms are co-located. Using data on subjective wellbeing, we test the basic features of our framework in the context of national and religious identities. Our results indicate that conflicting identities reduce subjective wellbeing, which is consistent with facing penalties for failure to conform to group norms. While the cost of identity conflict varies little by faith groups, formal education is effective in lowering the cost of identity conflict.
    Keywords: identity economics, identity conflict, subjective wellbeing
    JEL: I31 J15
    Date: 2017–02
  2. By: Tsegay Gebrekidan Tekleselassie (Ethiopian Development Research Institute)
    Abstract: This study focuses on the role of religiosity, general and political trust, local participation, and welfare metrics on wellbeing in rural areas using the Ethiopian Rural Household Survey. Ordered probit methods that account for Heteroscedasticity reveal distinctive correlates of overall life satisfaction and momentary happiness. Broader socio-economic factors such as religiosity and political governance strongly predict life satisfaction, while largely welfare metrics drive momentary happiness. The differential role of institutions on life satisfaction and momentary happiness is in comport with Deaton’s (2008) and Stevenson and Wolfers’s (2008) proposition that life satisfaction and happiness are not synonymous.
    Keywords: Institutions, Subjective Wellbeing, Ordered Probit, Developing Countries
    JEL: C25 D60 I31 Z12
    Date: 2017–02
  3. By: Wolf, Tobias; Hetschko, Clemens; Schöb, Ronnie
    Abstract: Using specific panel data of German welfare benefit recipients, we investigate the nonpecuniary life satisfaction effects of in-work benefits. Our empirical strategy combines difference-in-difference designs with synthetic control groups to analyze transitions of workers between unemployment, regular employment and employment accompanied by welfare receipt. Working makes people generally better off than being unemployed, but employed welfare recipients do not reach the life satisfaction level of regular employees. This implies that welfare receipt entails non-compliance with the norm to make one’s own living. Our findings allow us to draw cautious conclusions on employment subsidies paid as welfare benefits.
    JEL: I31 I38 J68
    Date: 2016

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