nep-hap New Economics Papers
on Economics of Happiness
Issue of 2023‒07‒24
two papers chosen by

  1. How the Well-Being Function Varies with Age: The Importance ofIncome, Health, and Social Relations over the Life Cycle By Juergen Bitzer; Erkan Goeren; Heinz Welsch
  2. The Benefits and Costs of Guest Worker Programs: Experimental Evidence from the India-UAE Migration Corridor By Suresh Naidu; Yaw Nyarko; Shing-Yi Wang

  1. By: Juergen Bitzer (University of Oldenburg, Department of Economics); Erkan Goeren (university of Oldenburg, Department of Economics); Heinz Welsch (University of Oldenburg, Department of Economics)
    Abstract: Previous literature has identified income, poor health and social relationships as the most important predictors of subjective well-being (SWB). In addition, the literature has identified a non-linear relationship between age and SWB, with a dip in SWB in mid-life. Explanations of the non-linear age-SWB relationship include the notion of unmet aspirations and the idea that people’s emotional response to the drivers of SWB changes with age. Against this background, we use representative longitudinal data for Germany (1992- 2019) with about 570, 000 observations for more than 88, 000 individuals aged 16-105 years to investigate if and how the association between SWB and its main predictors changes over the life cycle. Using fixed effects estimation to control for cohort effects and unobserved personal characteristics, we find that the marginal effects of income and social relationships vary with age in a wave-like fashion, while the negative marginal effect of poor health increases monotonically and progressively with age. Our results are similar for alternative measures of SWB (life satisfaction and living in misery) and for men and women. The agerelated changes in the importance of income and social relationships for SWB found in this paper help to explain the relationship between age and SWB found in previous literature.
    Keywords: subjective well-being; life satisfaction; life cycle happiness; income; health;social relations; employment
    Date: 2023–07
  2. By: Suresh Naidu; Yaw Nyarko; Shing-Yi Wang
    Abstract: We estimate the individual returns to temporary migration programs using a randomized experiment with several thousand job seekers in India applying to guest worker jobs in the United Arab Emirates (UAE). Working with construction companies and the UAE Ministry of Labor, we randomized job offers to potential migrant workers at recruitment sites. We measured effects on labor market outcomes, well-being, social relationships, and work satisfaction, as well as on labor intermediation costs, assets and debt. We find that workers who received the randomized offer experienced 30% higher earnings, and those who take up the offer to migrate to the UAE doubled their compensation. However, they also paid substantial upfront costs to labor intermediaries, financed by additional debt, that reduced take-home pay by about 10%. Migrants also reported a significant fall in subjective well-being, driven by increases in physical pain, effort, and heat. There were no significant effects on loneliness or other dimensions of well-being. Our finding of negative effects on well-being is consistent with the large share of workers offered jobs who did not migrate to the UAE. Extrapolating using a linear marginal treatment effects framework to workers who decline the UAE job offer, we find large and positive pecuniary returns to migration, even including intermediary fees, but even larger non-pecuniary costs.
    JEL: J6
    Date: 2023–06

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