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on Economics of Happiness |
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Issue of 2025–01–20
sixteen papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Ahn, Jiyeon (Sogang University); Ahn, Taehyun (Sogang University); Kim, Seonghoon (Singapore Management University) |
| Abstract: | Using 20 years of nationally representative panel data in South Korea, we estimate how life satisfaction responds to income shocks. We document that unexpected income changes significantly impact an individual's life satisfaction, and the magnitudes depend on the persistence of income shocks. We find that permanent income shocks substantially penetrate life satisfaction, while transitory income shocks have minimal impact. We also find that life satisfaction regarding external factors such as family income and leisure activities is more sensitive to income shocks than life satisfaction related to social relationships. Our findings imply that it is critical for the government to address persistent income losses in the economy (e.g., long-term unemployment driven by skill-biased technological changes or work-limiting disability) as a means to improving social welfare. |
| Keywords: | life satisfaction, insurance, income shocks, KLIPS |
| JEL: | D31 D60 I31 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17514 |
| By: | Mohammad Reza Farzanegan (School of Business and Economics, Philipps-Universität Marburg); Sven Fischer (School of Business and Economics, Philipps-Universität Marburg) |
| Abstract: | This study examines the effect of the “Woman, Life, Freedom†protests in Iran during the last quarter of 2022 on individual life satisfaction. To assess this impact, we use two original representative surveys conducted before and after the protests in 2022. The repeated cross-sectional dataset was generated using the same sampling approach in both surveys to ensure representativeness. Our results, based on probit regressions and an instrumental variable approach for a sample of 2, 256 individuals, show that the violent protest environment had a significant negative effect on life satisfaction in Iran. To measure respondents' exposure to the protests, this study uses various indicators based on the distance of individual respondents from the protest locations. Overall, the protest environment decreased the probability of life satisfaction by 3.6 percentage points. These results remain robust when controlling for other determinants of individual life satisfaction. Moreover, we find significant heterogeneity among respondents based on gender, with the largest negative impact of the protests on life satisfaction observed among women. This negative effect is more pronounced than the impact of unemployment. Another key finding is the heterogeneous effect depending on media consumption, with international TV viewers reporting the largest decrease in life satisfaction. The mechanism underlying these effects was further explored through mediation analysis, which reveals that feelings of insecurity and increased surveillance are key mediators of the total effect. |
| Keywords: | Protest; Violence, Life Satisfaction, Well-Being, Woman Life Freedom, Survey, Iran. |
| JEL: | D74 F52 H56 I31 N15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202501 |
| By: | Costa-Font, Joan (London School of Economics); Vilaplana-Prieto, Cristina (Universidad de Murcia) |
| Abstract: | The hidden value of adult informal care (IC) refers to the unaccounted value of informal care in overall costs of long-term care (LTC) estimates. This paper estimates the net value of adult IC in Europe, drawing on a well-being-based methodology. We use an instrumental variable strategy and a longitudinal and cross-country dataset to estimate the causal effect of the extensive and intensive margin of caregiving on subjective well-being. Finally, we estimate the so-called compensating surplus (CS), namely the income equivalent transfer, to compensate for the net disutility of caregiving. IC reduces average subjective well-being by about 1% compared to the mean (6% among co-residential caregivers). Relative to a country's Gross Domestic Product (GDP), the value of informal care ranges between 4.2% in France and 0.85% in Germany. Such relative value is inversely correlated with the country's share of formal LTC spending, leading to reconsidering LTC regimes. The average CS per hour for IC is 9.55€, with a range from 22€ per hour in Switzerland to 5€ per hour in Spain. Additionally, long-term CS tends to be lower than short-term CS. |
| Keywords: | caregiving, the value of time, wellbeing methods, Informal care, life satisfaction, daughters |
| JEL: | I18 J17 J18 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17490 |
| By: | Andrén, Daniela (Örebro University School of Business) |
| Abstract: | Advancing the economic understanding of suicide’s externalities, this study uses the well-being valuation method (WVM) to quantify the exposure to suicide, specifically through knowing someone near, family, or friend (NFF) who attempted or died by suicide. First, using data from a survey of Swedish adults, we separately estimate several life satisfaction equations. For each equation, we use the same comparison group of individuals who reported never having been exposed to others’ suicide, and compare them against different groups, each exposed to NFF-related suicide attempts or deaths. We find that income has a statistically significant positive impact on life satisfaction across all equations, and except for the experience of death alone, all other exposures to suicide have a statistically significant negative impact on life satisfaction. Next, we use these estimates to calculate the monetary compensation required to offset the decline in life satisfaction for individuals exposed to a NFF’s suicide attempt or death. The required annual monetary compensation to offset this decline ranges from 6, 400 to 9, 910 euros, which suggests an economic value for mitigating the negative effects of suicide exposure equivalent to around a median monthly household income. However, our findings should be considered with caution when used to inform healthcare policies and prevention strategies aimed at reducing the spillover effects of exposure to suicide. |
| Keywords: | suicide exposure; suicide attempt; life satisfaction; suicide spillover; well-being valuation method; life satisfaction approach; Sweden |
| JEL: | C21 I12 I18 I31 |
| Date: | 2025–01–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2025_002 |
| By: | Frijters, Paul |
| Abstract: | While in his early years, Kahneman followed the world of classic utilitarianism in which smart individuals base decisions on how they will truly feel each moment in the future, Kahneman in Mandel (2018) adopted a very different position, namely that what matters is the story people tell of their lives. He thus grappled with evolving stories of both the future and the past, and the presence of different decision-supporting evaluations for the short-run and the long-run. |
| Keywords: | Kahneman; happiness; satisfaction; updating; utility; wellbeing |
| JEL: | D60 I31 |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126105 |
| By: | Budd, John W.; Lamare, J Ryan |
| Abstract: | The incompleteness of labour contracts is expected to cause uncertainty among forward-looking employees as to whether implicit contracts with greater intrinsic rewards in lieu of pay will be breached by employers, thus reducing employee well-being. David Marsden theorized that an organization's form of governance can serve as a stable, easy-to-observe signal of the likelihood of a breach, and thus employees across governance types will exhibit different extrinsic–intrinsic trade-offs. Using the European Working Conditions Survey, we extend Marsden's theory and find supportive evidence across 35 European countries and 9 governance categories. We also extend Marsden's theorizing into the comparative domain and analyse patterns of subjective well-being, compensatory pay and organizational governance across varieties of political economies. |
| JEL: | R14 J01 J50 |
| Date: | 2024–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126118 |
| By: | Joan Costa-Font; Cristina Vilaplana-Prieto; Joan Costa-i-Font |
| Abstract: | The hidden value of adult informal care (IC) refers to the unaccounted value of informal care in overall costs of long-term care (LTC) estimates. This paper estimates the net wellbeing value of adult IC in Europe, drawing on a wellbeing-based methodology. We use an instrumental variable strategy and a longitudinal and cross-country dataset to estimate the causal effect of the extensive and intensive margin of caregiving on subjective wellbeing. Finally, we estimate the so-called compensating surplus (CS), namely the income equivalent transfer to compensate for the net disutility of caregiving. We find that IC reduces average subjective wellbeing by about 1% compared to the mean (6% among co-residential caregivers). Relative to a country’s Gross Domestic Product (GDP), the value of informal care ranges between 4.2% in France and 0.85% in Germany, which is inversely correlated with the country’s share of formal LTC spending and leads to reconsidering LTC regimes. The average CS per hour of IC ranges between 9.55 €/hour, ranging between 22 €/hour in Switzerland and 5 €/hour in Spain. Finally, we also find that long-term CS is smaller than short-term CS. |
| Keywords: | informal care, wellbeing methods, the value of time, caregiving, daughters, life satisfaction |
| JEL: | I18 J17 J18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11535 |
| By: | Michalis Drouvelis; Zeyu Qiu |
| Abstract: | This paper investigates the effects of induced emotions on leading-by example. Using an online sample of more than 1, 000 participants, we observe behavior in a one-shot sequential voluntary contribution mechanism game where leaders and followers are induced to be either happy or angry. Our findings show that angry leaders contribute less than happy leaders. The same effect is observed when considering followers’ behavior. Crucially, controlling for leaders’ contributions, the mood effects on followers’ behavior disappear, implying that it is sufficient to induce emotions only on leaders in order to affect followers’ behaviour. Our findings further highlight the role of emotions as a causal force, suggesting that negative changes in well-being can bring about adverse effects on team cooperation. |
| Keywords: | induced emotions, anger, happiness, contribution, leading-by-example |
| JEL: | C92 H41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11531 |
| By: | Krekel, Christian; Shreedhar, Ganga; Lee, Helen; Marshall, Claire; Boler, Alison; Smith, Allison; Dolan, Paul |
| Abstract: | We study the wellbeing returns from volunteering in England's National Health Service (NHS) Volunteer Responders, set up in response to Covid-19. Using linked survey and administrative data, we exploit the oversubscription of volunteers and the random allocation of tasks via an app to establish causality. Volunteers show stronger wellbeing and feelings of belongingness and connectedness to their local area. Welfare analyses suggest that the benefits of the programme substantially exceeded its costs. We are the first to study the welfare effects of a nationwide volunteering programme. Our findings show that pro-social behaviour improves personal wellbeing as well as social welfare. |
| Keywords: | volunteering; pro-social behaviour; causal wellbeing returns; quasi-experiment; welfare analysis |
| JEL: | I31 I38 D61 D64 |
| Date: | 2024–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126209 |
| By: | Lise Szekér; Maria Gaudiino; Anja Van den Broeck; Karolien Lenaerts; Sem Vandekerckhove; Steven Vanmarcke; Oscar Vargas Llave; Viginta Ivaskaité-Tamosiuné; Sara Riso |
| Abstract: | Psychosocial risks represent a major challenge to the health and well-being of workers in the EU. While the COVID-19 pandemic intensified some of these risks, it also increased awareness of them among policymakers. Using data from the European Working Conditions Telephone Survey 2021 and building on a theoretical model that differentiates between job stressors and job resources, this report examines key psychosocial risks in the workplace and their impact on health. It also assesses job characteristics that could help to protect workers’ health and well-being in post-pandemic workplaces. While the prevalence of psychosocial risks varies across the Member States, work–life interference and work intensity are the most widespread risks in the EU, and the prevalence of the latter increased during the pandemic. Job stressors such as adverse social behaviour and job insecurity continue to be experienced by a significant proportion of workers in the EU. Although resources are available to combat some risks, these may not be sufficient, and preventive policies need to be implemented to prevent risks from arising in the first place. |
| Keywords: | HIVA-Civil Society - Social Dial, HIVA-Work and Organisation, EWCS, psychosocial risks, workers well-being |
| Date: | 2023–11–23 |
| URL: | https://d.repec.org/n?u=RePEc:ete:woswps:729726 |
| By: | Isabel Skak Olufsen (Department of Economics, University of Copenhagen); Jesper Fries (Department of Economics, University of Copenhagen) |
| Abstract: | We study the effect of having high socioeconomic status (SES) peers on pupils’ wellbeing, absence rate, and academic performance in elementary school. We compare pupils in the same school who started school in different years and, consequently, were exposed to different shares of high-SES peers. We use a unique combination of administrative, survey, and test data on pupils in Danish public schools. We find that a higher share of high-SES peers increases well-being and performance while lowering absence rates slightly. Our results imply that educational inequalities may increase due to the growing concentration of high-SES pupils in certain schools. |
| Keywords: | Peer effects, well-being, academic performance, primary school |
| JEL: | I21 I24 I31 |
| Date: | 2025–01–10 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2501 |
| By: | Begoña Cabeza Martínez (European Commission, Joint Research Centre); Béatrice d’Hombres (European Commission, Joint Research Centre); Matija Kovacic (European Commission, Joint Research Centre (JRC); Global Labor Organization (GLO); Ca’ Foscari University of Venice) |
| Abstract: | The rapid rise of social media has transformed communication and raised concerns about its societal impact, particularly on mental health and well-being. Using data from a novel EU-wide survey, this study investigates the association between social media usage, loneliness, and emotional distress among young people across 27 European member states. We find that intensive use of social networking sites correlates positively with loneliness and emotional distress, whereas excess use of messaging tools plays a very limited role. These findings are robust to alternative measures of loneliness and emotional distress and to a variety of model specifications. Young adults who either grew up with smartphones during their teenage years or their twenties are particularly vulnerable to excessive use of social network sites. Further analysis suggests that the harmful effects of excessive social networking site consumption may arise from its predominantly passive nature, while instant messaging tools, which primarily involve active engagement, do not exhibit this detrimental impact. |
| Keywords: | loneliness; mental well-being; social media use; Europe |
| JEL: | L82 D91 I12 I31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:01 |
| By: | Hiilamo, Aapo |
| Abstract: | While debts are widely used financial tools, few longitudinal studies investigating potential causal links between debts and mental wellbeing exist among older adults. Older adults, particularly those not employed, are less likely to have increasing incomes to help them pay off their debts. This study investigates whether older adults with non-mortgage debts in three different labour market states have lower mental wellbeing and, separately, whether it is likely that reducing their debts helps to improve mental wellbeing. Using the English Longitudinal Study of Ageing, the study focuses on the English context, which is particularly interesting due to the high levels of, and a unique policy approach to, private indebtedness. The results indicate that people with debts have lower mental wellbeing (more depressive symptoms and lower quality of life) in all categories, but the mental pain linked to debts is stronger for people who are jobless (not working, not retired). The analysis from a causal perspective suggests that getting rid of debts may reduce depressive symptoms among people who are jobless but may also improve quality of life among the retired and employed. Both these findings suggest that mental health services should work closely with debt advice when needed. |
| Keywords: | mental health; household debt; debt help; older adults; employment |
| JEL: | N0 |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:117557 |
| By: | Leigh, Andrew (Parliament of Australia); Robson, Stephen (Australian National University) |
| Abstract: | Using multiple sources, we document a substantial worsening in the mental wellbeing of Australians aged 15-24, as measured by surveys, self-harm hospitalisations and suicide deaths. The shift began around 2007-2010 and is worse for young women than for young men. While several factors could be to blame, we present six pieces of evidence suggesting that smartphones and social media may have played a causal role in damaging the mental health of young Australians. |
| Keywords: | mental health, technology, smartphones, social media |
| JEL: | D91 I12 L82 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17525 |
| By: | Booth, Jonathan; Lup, Daniela |
| Abstract: | While it is well-known that employees with disabilities have significantly more negative work experiences compared to other employees, research geared towards understanding how employers could improve some of these experiences is still underdeveloped. To advance this research agenda, this study investigates links between five distinct types of discretionary arrangements (work discretion, scheduling discretion, part-timing, homeworking and pay for individual performance), and outcomes related to work experiences and the wellbeing of employees with disabilities (job satisfaction, perception of fairness, recognition, motivation, engagement, work stress and work-life interference). To explore these links, we use data from the European Working Conditions Survey (2015). We find that not all work arrangements that increase discretion at the workplace have a positive impact on employees with disabilities and that some can be especially detrimental. By unpacking the multiple ways in which various types of discretion at the workplace affect employees with disabilities, this study not only makes a theoretical contribution but also provides employers who aim to improve the working experiences of employees with disabilities with some empirical evidence to help them take more inclusive actions. |
| Keywords: | disability; discretionary work practice; wellbeing; discretionary work practices |
| JEL: | J50 R14 J01 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126269 |
| By: | Portocarrero, Florencio; Newbert, Scott; Young, Maia; Zhu, Lily |
| Abstract: | Entrepreneurial affect has emerged as a burgeoning area of study, with a wealth of articles demonstrating that affect, broadly conceptualized, plays an important part in entrepreneurial life. While a few affective phenomena, such as passion and positive and negative affect, are primarily driving the affective revolution in entrepreneurship, a wide range of additional forms of affect, from momentary feelings to enduring affective dispositions, have been found to influence entrepreneurs’ judgements, decision-making, attitudes, and behaviors in distinct parts of the entrepreneurial process. Moreover, entrepreneurs’ affective experiences and displays of these experiences influence entrepreneurial behaviors and investors’ decision-making. Although this is an exciting time for work on entrepreneurial affect, several theoretical and empirical inconsistencies impede further knowledge accumulation. To assess how and why affect is critical to entrepreneurship, to clarify the theoretical inconsistencies, and to provide an integrative framework, we conduct a systematic review of 276 published empirical and conceptual articles on entrepreneurial affect. In doing so, we analyze how various affective phenomena (e.g., emotions, moods, sentiments), along with their discrete forms (e.g., anger, grief, happiness), influence and are influenced by specific stages of the entrepreneurial process. We conclude that while this body of research confirms that entrepreneurship is an emotional endeavor, the collective approach has thus far obscured a more detailed and useful understanding of affect in each stage of the entrepreneurial process. We examine the theoretical and empirical approaches taken to date and lay out an agenda for future scholars, thus bolstering the affective revolution in entrepreneurship. |
| JEL: | J50 |
| Date: | 2024–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126090 |