nep-hap New Economics Papers
on Economics of Happiness
Issue of 2019‒12‒02
eight papers chosen by

  1. Innovation and Entrepreneurs’ Subjective Well-being The mediation effect of job satisfaction and satisfaction with work-life balance. By Jiequn Liu; Francis Munier
  2. The Baby Year Parental Leave Reform in the GDR and Its Impact on Children’s Long-Term Life Satisfaction By Katharina Heisig; Larissa Zierow
  3. Adaptation or Scale-Norming? Theory and Preliminary Evidence on the Challenges of Interpreting Life Satisfaction Scale Data By Fabian, Mark
  4. Structural changes in economic growth and well-being. The case of Italy’s parabola By Maurizio Pugno; Francesco Sarracino
  5. Big-city life (dis)satisfaction? The effect of living in urban areas on subjective well-being By David Loschiavo
  6. The Mental Health Effects of Retirement By Picchio, Matteo; van Ours, Jan C.
  7. Do Start-Up Subsidies for the Unemployed Affect Participants' Well-Being? A Rigorous Look at (Un-)Intended Consequences of Labor Market Policies By Caliendo, Marco; Tübbicke, Stefan
  8. Self-reported wellbeing indicators are a valuable complement to traditional economic indicators but aren’t yet ready to compete with them By Dan Benjamin; Kristen Cooper; Ori Heffetz; Miles Kimball

  1. By: Jiequn Liu; Francis Munier
    Abstract: The aim of the article is to study the relationship between the subjective well-being of the entrepreneur and innovation according to the mediation effect of job satisfaction and satisfaction with work-life balance. we define the concepts and interpret theoretical contributions to identify our assumptions. The research design based on correlational relationship, mediation effect and interaction effect to explore relationship among innovation, life satisfaction, job satisfaction and satisfaction with work-life balance of the entrepreneur.
    Keywords: entrepreneur, subjective well-being, innovation, work life balance, job satisfaction.
    JEL: M13 O31 L29
    Date: 2019
  2. By: Katharina Heisig; Larissa Zierow
    Abstract: This article investigates the effects of an increase in paid parental leave — twelve months instead of six months — on children’s long-term life satisfaction. The historical setting under study, namely the former German Democratic Republic (GDR), allows us to circumvent problems of selection of women into the labor market and an insufficient or heterogeneous non-parental child care supply, which are issues many other studies on parental leave reforms face. Using data from the German Socio-Economic Panel (SOEP) we analyze the birth cohorts from 1980 to 1989 at adult age, and apply a difference-in-difference design making use of the very specific timing of the GDR’s parental leave reforms in 1976 and 1986. We find significant and robust positive parental leave effects on life satisfaction. We also analyze whether the increase in life satisfaction is driven by a positive development of personality, health factors, schooling or labor market outcomes. Our results suggest that the increase in life satisfaction might be partially explained by personality development for individuals from low socioeconomic backgrounds and boys. For individuals from high socioeconomic backgrounds, it might be driven by a better health.
    Keywords: parental leave, child care, child development, well-being, happiness, socio-emotional development
    JEL: J13 J22 I31
    Date: 2019
  3. By: Fabian, Mark
    Abstract: Research into “evaluated wellbeing” in the subjective well-being (SWB) literature is typically conducted using life satisfaction scales. The majority of SWB scholars take the data these scale questions produce at face value and interpret what they see therein as “strong adaptation”. This is the idea that people rapidly acclimatise to shocks to their life satisfaction and return to a baseline or “set-point” level of life satisfaction. This paper presents an alternate interpretation: people “scale-norm” in response to shocks. This means that they use qualitatively different scales to respond to life satisfaction scale questions in different waves of a survey. Scale-norming can make responses to different scale questions neither inter-personally nor inter-temporally comparable, even ordinally. This paper presents a theoretical exposition of scale-norming in the context of life satisfaction research and reviews existing empirical evidence of its existence. It then presents results from two studies (N1 = 277; N2 = 1050) using a novel life satisfaction metric designed to identify scale-norming in life satisfaction scale responses. Results from both studies suggest that scale-norming does in fact plague life satisfaction scale questions, and further, that our understanding of adaptation may be significantly biased by our inability to account for such normalisation.
    Date: 2019–07–26
  4. By: Maurizio Pugno (University of Cassino and Lazio Meridionale); Francesco Sarracino (Institut National de la Statistique et des Etudes Economiques du Grand-Duché du Luxembourg)
    Abstract: The controversies on the relationship (called ‘gradient’) between the long-run trends of GDP and subjective well-being oppose those who claim that the gradient is positive, to those who argue that it is nil. The possible existence of structural breaks of the gradient within the same country is a challenge to both views. By focusing on the case of Italy, we show that the long-run trends of GDP and of well-being turned from increasing to decreasing, and that the gradient exhibits a rise through two structural breaks. We adopt macro- and micro-economic approaches to explain why the gradient changes. We find evidence consistent with the ‘loss aversion’ hypothesis. In addition, the gradient changed because the erosion of trust in others, the increase of financial dissatisfaction and worsened health hinder well-being independently from income.
    JEL: I31 O11 O12 O5
    Date: 2019–11
  5. By: David Loschiavo (Bank of Italy)
    Abstract: This paper investigates the effect of big-city life on individuals' well-being. Combining data on Italian municipalities' characteristics with individual-level survey data, I find that city size negatively affects subjective well-being. This association is not driven by omitted variable bias or by spatial sorting of citizens. Commute time accounts for most of the differences in subjective well-being among cities of different size. There is suggestive evidence that the negative effect of commuting on well-being is caused by reduced time availability for fostering personal relationships and engaging in leisure activities. This finding suggests that interventions reducing the amount of time people spend in an unpleasant state can spur agglomeration economies and their contribution to aggregate productivity and growth.
    Keywords: subjective well-being, urbanization, commute time
    JEL: D60 I3 R23 R41 H54 J61
    Date: 2019–06
  6. By: Picchio, Matteo; van Ours, Jan C.
    Abstract: We study the retirement effects on mental health using a fuzzy regression discontinuity design based on the eligibility age to the state pension in the Netherlands. We find that the mental effects are heterogeneous by gender and marital status. Retirement of partnered men positively affects mental health of both themselves and their partners. Single men retiring experience a drop in mental health. Female retirement has hardly any effect on their own mental health or the mental health of their partners. Part of the effects seem to be driven by loneliness after retirement.
    Keywords: Retirement,health,well-being,happiness,regression discontinuity design
    JEL: H55 J14 J26
    Date: 2019
  7. By: Caliendo, Marco (University of Potsdam); Tübbicke, Stefan (University of Potsdam)
    Abstract: We estimate the long-term effects of start-up subsidies (SUS) for the unemployed on subjective outcome indicators of well-being, as measured by the participants' satisfaction in different domains. This extends previous analyses of the current German SUS program ("Gründungszuschuss") that focused on objective outcomes – such as employment and income – and allows us to make a more complete judgment about the overall effects of SUS at the individual level. This is especially important because subsidizing the transition into self-employment may have unintended adverse effects on participants' well-being due to its risky nature and lower social security protection, especially in the long run. Having access to linked administrative-survey data providing us with rich information on pre-treatment characteristics, we base our analysis on the conditional independence assumption and use propensity score matching to estimate causal effects within the potential outcomes framework. We find long-term positive effects on job satisfaction but negative effects on individuals' satisfaction with their social security situation. Further findings suggest that the negative effect on satisfaction with social security may be driven by negative effects on unemployment and retirement insurance coverage. Our heterogeneity analysis reveals substantial variation in effects across gender, age groups and skill levels. The sensitivity analyses show that these findings are highly robust.
    Keywords: start-up subsidies, propensity score matching, counterfactual analysis, well-being
    JEL: C14 L26 H43 I31 J68
    Date: 2019–11
  8. By: Dan Benjamin (University of Southern California and NBER); Kristen Cooper (Gordon College); Ori Heffetz (Cornell University); Miles Kimball (University of Colorado Boulder and NBER)
    Abstract: We join the call for governments to routinely collect survey-based measures of self-reported wellbeing and for researchers to study them. We list a number of challenges that have to be overcome in order for these measures to eventually achieve a status competitive with traditional economic indicators. We discuss in more detail one of the challenges, comprehensiveness: single-question wellbeing measures do not seem to fully capture what people care about. We briefly review the existing evidence, suggesting that survey respondents, when asked to make real or hypothetical tradeoffs, would not always choose to maximize their predicted response to single-question wellbeing measures. The deviations appear systematic, and persist under conditions where alternative explanations are less plausible. We also review an approach for combining single-question measures into a more comprehensive wellbeing index—an approach that itself is not free of ongoing theoretical and implementational challenges, but that we view as a promising direction.
    Date: 2019–10–02

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.