nep-hap New Economics Papers
on Economics of Happiness
Issue of 2024‒04‒08
four papers chosen by
Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca

  1. Early Life Circumstance and Adult Psychological Well-being By Kerui Geng
  2. Income-well-being gradient in sickness and health By Petri Böckerman; Ohto Kanninen; Ilpo Suoniemi
  3. Micro-geography and public housing tenant wellbeing By Arthur Grimes; Conal Smith; Kimberley O’Sullivan; Philippa Howden-Chapman; Lydia Le Gros; Rachel Kowalchuk Dohig
  4. Beyond literacy: The incremental value of non-cognitive skills By Beatrice Rammstedt; Clemens M. Lechner; Daniel Danner

  1. By: Kerui Geng (Tulane University)
    Abstract: The disparity in psychological well-being during adulthood can be traced back to early-life circumstances. While existing literature has highlighted the significant influence of contemporaneous factors on psychological well-being, little is known about its long-term determinants. I study the impact of early life circumstances on adult psychological well-being using the property reform in China as a positive and policy-driven change in economic resources in early life. Exploiting the staggered adoption of the reform, I find that exposure to property reform during the in-utero period and early childhood leads to higher adult life satisfaction, higher adult happiness, and better adult mental health. Larger effects are found among males and those whose parents are less educated. Birth weight, parental investment, adult health, and subjective assessments of one's circumstances are likely operative channels of effect. These findings shed light on the long-lasting consequences of early-life circumstances on psychological well-being in adulthood.
    Keywords: land reform, early-life circumstances, adult psychological well-being, life satisfaction, mental health
    JEL: I15 O15
    Date: 2024–03
  2. By: Petri Böckerman; Ohto Kanninen; Ilpo Suoniemi
    Abstract: We propose a method of studying the value of insurance. For this purpose, we analyze well-being of the same individuals, comparing sick and healthy years in German panel survey data on life satisfaction. To impose structure on the income–well-being gradient, we fit a flexible utility function to the data, focusing on the differences in marginal utility in the sick and the healthy state, by allowing for a “fixed cost of sickness”. We find that marginal utility of income is higher in the sick state. We use our estimates to gauge the value of sickness insurance for Baily-Chetty type optimal policy calculations. We also show that the income–well-being gradient has steepened over time in Germany and we use the fitted model to characterize this change.
    Keywords: life satisfaction, state dependence, risk aversion, social insurance, optimal benefits, sickness absence
    JEL: C13 H55 I13
  3. By: Arthur Grimes (Motu Economic and Public Policy Research); Conal Smith (K?t?t? Insight); Kimberley O’Sullivan (University of Otago); Philippa Howden-Chapman (University of Otago); Lydia Le Gros (University of Otago); Rachel Kowalchuk Dohig (University of Otago)
    Abstract: The micro-geography of people’s wellbeing depends on house and neighbourhood characteristics. We show that the form of tenancy is also important. Identical people in identical settings may have different wellbeing outcomes depending on their security of housing tenure. Our findings utilise a survey administered to residents in public rental housing, private rentals and owner-occupiers in New Zealand, focusing on the capital city, Wellington. Despite selection effects which are likely to bias findings against higher wellbeing for public housing tenants, we find that public tenants have higher subjective wellbeing (WHO-5 and Life satisfaction) than do private tenants, and similar wellbeing to owner-occupiers. Length of tenure helps to explain wellbeing differences between public and private tenants, likely reflecting New Zealand law under which private renters have insecure tenure (relative to many overseas jurisdictions). We find also that wellbeing is associated with residents’ perceptions of house suitability and neighbourhood suitability. House suitability reflects house quality, condition, cold and dampness. Neighbourhood suitability reflects the importance of social capital and of living in a safe area. Some characteristics are more important for certain population groups than for others; hence analysts should be wary of generalising about relationships between microgeographic factors and wellbeing.
    Keywords: Public housing, tenant wellbeing, house quality, neighbourhood characteristics
    JEL: I31 I38 R23 R28 R38
    Date: 2023–09
  4. By: Beatrice Rammstedt; Clemens M. Lechner; Daniel Danner
    Abstract: This paper reviews a number of previous studies that have investigated how measure of non-cognitive skills predict important life outcomes such as educational attainment, employment, earnings, and self-reported health and life satisfaction. All reviewed studies analyse data from large-scale surveys from multiple countries and rely on the Big-Five framework to assess non-cognitive skills. The paper finds that measures of non-cognitive skills are robustly and consistently associated to indicators of life success in youth and adulthood, and have incremental predictive power over traditional measures of cognitive ability.
    Date: 2024–03–26

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