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on Economics of Happiness |
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Issue of 2009‒05‒23
fifteen papers chosen by |
| By: | Christoph Wunder; Andrea Wiencierz; Johannes Schwarze; Helmut Küchenhoff; Sara Kleyer; Philipp Bleninger |
| Abstract: | This paper applies semiparametric regression models using penalized splines to investigate the profile of well-being over the life span. Splines have the advantage that they do not require a priori assumptions about the form of the curve. Using data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel Study (SOEP), the analysis shows a common, quite similar, age-specific pattern of life satisfaction for both Britain and Germany that can be characterized by three age stages. In the first stage, life satisfaction declines until approximately the fifth life decade. In the second age stage, well-being clearly increases and has a second turning point (maximum) after which well-being decreases in the third age stage. Several reasons for the three-phase pattern are discussed. We point to the fact that neither polynomial functions of the third nor the fourth degree describe the relationship adequately: polynomials locate the minimum and the maximum imprecisely. In addition, our analysis discusses the indistinguishability of age, period, and cohort effects: we propose estimating age-period models that control for cohort effects including substantive variables, such as the life expectancy of the birth cohort, and further observed socioeconomic characteristics in the regression. |
| Keywords: | Subjective well-being, life satisfaction, semiparametric regression, penalized splines, age-period model, age-cohort model |
| JEL: | C14 C23 D10 I31 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp889&r=hap |
| By: | Eva M. Berger |
| Abstract: | In contrast to unemployment, the effect of non-participation and parttime employment on subjective well-being has much less frequently been the subject of economists' investigations. In Germany, many women with dependent children are involuntarily out of the labor force or in part-time employment because of family constraints (e.g., due to lack of available and appropriate childcare). Using data from the German Socio-Economic Panel (SOEP) Study, this paper analyzes the impact of involuntary familyrelated non-participation and part-time employment on mothers' life satisfaction. Controlling for unobserved individual fixed effects, I find that both the pecuniary effects (foregone earnings) and the non-pecuniary effects (psychological costs) are significantly negative. Compensating income variations reveal that the residual household income would have to be raised by 182 percent (157 percent/77 percent) in order to just offset the negative effect of not being able to work because of family constraints (of being in short/long part-time employment). Moreover, in terms of overall happiness among mothers, non-participation is revealed to be a more serious problem than unemployment. |
| Keywords: | Subjective well-being, life satisfaction, labor force participation, part-time, maternal employment, work-family conflict |
| JEL: | I31 J21 J22 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp890&r=hap |
| By: | Eva M. Berger |
| Abstract: | In contrast to unemployment, the effect of non-participation and parttime employment on subjective well-being has much less frequently been the subject of economists' investigations. In Germany, many women with dependent children are involuntarily out of the labor force or in part-time employment because of family constraints (e.g., due to lack of available and appropriate childcare). Using data from the German Socio-Economic Panel (SOEP) Study, this paper analyzes the impact of involuntary familyrelated non-participation and part-time employment on mothers' life satisfaction. Controlling for unobserved individual fixed effects, I find that both the pecuniary effects (foregone earnings) and the non-pecuniary effects (psychological costs) are significantly negative. Compensating income variations reveal that the residual household income would have to be raised by 182 percent (157 percent/77 percent) in order to just offset the negative effect of not being able to work because of family constraints (of being in short/long part-time employment). Moreover, in terms of overall happiness among mothers, non-participation is revealed to be a more serious problem than unemployment. |
| Keywords: | Subjective well-being, life satisfaction, labor force participation |
| JEL: | I31 J21 J22 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp178&r=hap |
| By: | Ingvild Almas; Magne Mogstady |
| Abstract: | Differences in individual wealth holdings are widely viewed as a driving force of economic inequality. However, as this finding relies on cross-section data, we may confuse older with wealthier. We propose a new method to adjust for age effects in cross-sections, which eliminates transitory wealth inequality due to age, yet preserves inequality arising from other factors. This new method is superior to existing methods, like the much used Paglin-Gini, which is shown to have several problems. A new cross-country comparable database reveals that the choice of method is empirically important: Existing methods yield erroneous wealth inequality rankings of countries. |
| Keywords: | Wealth inequality, Life cycle, Age adjustments, Gini coefficient |
| JEL: | D31 D63 D91 E21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp181&r=hap |
| By: | Anna M. Carabelli; Mario A. Cedrini (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont) |
| Abstract: | In their latest book (2008), Bruno Frey and the members of the research group he chairs at the University of Zurich announce that happiness research is leading a revolution in economics. More precisely, the revolutionary character of happiness economics would draw on measurement, on how people value goods and social conditions, as well as on policies. This paper aims to discuss critically this claim and what we identified as five crucial issues of mainstream happiness economics, i.e.: 1. the ambiguous relationship between income and happiness, 2. the “back to Bentham” approach, 3. problems of incommensurability, 4. heterogeneity and multidimensionality, 5. the scope of economics in relation to happiness. In so doing, we attempt to review John Maynard Keynes’s vision about happiness and economics, starting from a revisiting of his essay Economic Possibilities for Our Grandchildren in the light of his early unpublished writings on ethics as well as of the whole bulk of his writings in economics. We then provide reasons to argue that the rediscovery of Keynes’s legacy in this respect can be of help to point out and examine the most controversial aspects of today’s happiness research. |
| Keywords: | Happiness, Happiness economics, John Maynard Keynes, Economic Possibilities for Our Grandchildren |
| JEL: | H1 I31 B31 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:upo:upopwp:123&r=hap |
| By: | Cervellati, Matteo (University of Bologna); Sunde, Uwe (University of St. Gallen) |
| Abstract: | In this paper we investigate the causal effect of life expectancy on economic growth by explicitly accounting for the role of the demographic transition. In addition to focusing on issues of empirical identification, this paper emphasizes the role of the econometric specification. We present a simple theory of the economic and demographic transition where individuals' education and fertility decisions depend on their life expectancy. The theory predicts that before the demographic transition improvements in life expectancy primarily increase population. Improvements in life expectancy do, however, reduce population growth and foster human capital accumulation after the onset of the demographic transition. This implies that the effect of life expectancy on population, human capital and income per capita is not the same before and after the demographic transition. Moreover, a sufficiently high life expectancy is ultimately the trigger of the transition to sustained income growth. We provide evidence supporting these predictions using data on exogenous mortality reductions in the context of the epidemiological revolution. |
| Keywords: | life expectancy, demographic transition, epidemiological revolution, heterogeneous treatment effects |
| JEL: | E10 J10 J13 N30 O10 O40 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4160&r=hap |
| By: | Salm, Martin (Tilburg University) |
| Abstract: | This study estimates the effect of job loss on health for near elderly employees based on longitudinal data from the Health and Retirement Study. Previous studies find a strong negative correlation between unemployment and health. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason – the closure of their previous employers' business. I find that the unemployed are in worse health than employees, and that health reasons are a common cause of job termination. In contrast, I find no causal effect of exogenous job loss on various measures of physical and mental health. This suggests that the inferior health of the unemployed compared to the employed could be explained by reverse causality. |
| Keywords: | job displacement, health, unemployment |
| JEL: | I12 J63 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4147&r=hap |
| By: | Haan, Peter (DIW Berlin); Myck, Michal (DIW Berlin) |
| Abstract: | While there is little doubt that the probability of poor health increases with age, and that less healthy people face a more difficult situation on the labour market, the precise relationship between facing the risks of health deterioration and labour market instability is not well understood. Using twelve years of data from the German Socio-Economic Panel we study the nature of the relationship between poor health and non-employment on a sample of German men aged 30-59. We propose to model poor health and non-employment as interrelated risks determined within a dynamic structure conditional on a set of individual characteristics. Applying dynamic panel estimation we identify the mechanism through which poor health contributes to the probability of being jobless and vice versa. We find an important role of unobserved heterogeneity and evidence for correlation in the unobservable characteristics determining the two processes. The results also show strong persistence in the dynamics of poor health and non-employment. |
| Keywords: | health, non-employment, risk, ageing, dynamic panel data |
| JEL: | C33 J21 J14 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4154&r=hap |
| By: | Steffen Rätzel (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | In empirical analyses, employment status has a substantial influence on individual wellbeing. People without work are consistently less happy, even after controlling for income. This result seems to contradict the standard theory assumption of labour disutility. In this paper, we analyze the impact of working time on happiness. The results show distinct positive utility effects caused by employment and working time. Happiness correlates positively with hours worked. However, there is an inverse U-shaped correlation – excessive hours reverse the relationship. Additionally, the results show the importance of exogenously given deviations of working time from the individually preferred labour supply. These discrepancies reduce well-being and counterbalance the positive effects of work. |
| Keywords: | Labour Supply, Working Hours, Happiness, Life Satisfaction |
| JEL: | J22 J30 D60 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:09005&r=hap |
| By: | Aronsson, Thomas (Department of Economics, Umeå University) |
| Abstract: | This chapter concerns welfare measurement in economies, where the government raises revenue by means of distortionary taxation. A major issue is the treatment of (state-variable) public goods in the context of social accounting. Although the marginal value that the government attaches to a public good is model-specific (as it depends on the exact nature of the underlying decision-problem), the analysis explains how the direct resource cost of providing increments to the public good and the marginal cost of public funds can be used to measure this marginal value. The first part of the chapter is based on a representative-agent growth model with linear taxation, whereas the second part addresses a model with heterogeneous agents and nonlinear taxation. The latter model also provides a framework for analyzing redistribution in the context of social accounting, and enables me to compare the results with those that would follow in a first best resource allocation. |
| Keywords: | Social accounting; second best; public goods |
| JEL: | D30 D60 H21 H41 |
| Date: | 2009–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0773&r=hap |
| By: | Lynge Nielsen |
| Abstract: | The paper provides estimates of global relative poverty trends from 1970 onwards. Relative poverty is shown to have decreased significantly, but at the same time there has been a worsening poverty outcome among up to one billion of the world's poorest citizens. The paper also proposes a straightforward method for dividing an income distribution into classes of poor, rich, and middle-class. |
| Keywords: | Poverty , Income distribution , Economic growth , Economic forecasting , Social indicators , |
| Date: | 2009–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:09/93&r=hap |
| By: | Jan Swasthya Abhiyan JSS |
| Abstract: | In this article hard realities of people’s health in India today, and some of the maladies of recent health policies are examined. This is followed by core recommendations to strengthen and reorient the health system so as to ensure quality health care for all. The political parties can include these in their election manifestos for the upcoming general election as a demonstration of their commitment to public health. Jan Swasthya Abhiyan, looks forward to such a commitment from all political forces in the country. |
| Keywords: | political parties, medical education, child, India, china, infant mortality, NFHS, vaccination coverage, health, policies, system, election manifestos, care, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:1933&r=hap |
| By: | Raghav Gaiha; Vani S. Kulkarni; Manoj K. Pandey; Katsushi S. Imai |
| Abstract: | Despite accelerated growth there is pervasive hunger, child undernutrition and mortality. Our analysis focuses on their determinants. Raising living standards alone will not reduce hunger and undernutrition. Reduction of rural/urban disparities, income inequality, consumer price stabilisation, mothers’ literacy have all roles of varying importance in different nutrition indicators. Somewhat surprisingly, PDS does not have a significant effect on any of them. Generally, child undernutrition and mortality rise with poverty. Our analysis confirms that media exposure triggers public action, and helps avert child undernutrition and mortality. Drastic reduction of economic inequality is in fact key to averting child mortality. |
| Keywords: | Hunger, underweight, child mortality, prices, inequality, literacy, India |
| JEL: | I10 I31 I32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2009-04&r=hap |
| By: | Fischer, Justina AV |
| Abstract: | Previous happiness research has explicitly assumed that subjective well-being is U-shaped in age. This paper sheds new light on this issue testing several functional forms. Using micro data from the World Values Survey on 44’000 persons in 30 economically well-developed OECD countries with long life expectancies, we reveal that age follows a hyperbolic form. We find that life satisfaction reaches another local maximum around the age of 83, with a level identical to that of a 26-years old. This hyperbolic well-being-age relation is robust to the inclusion of cohort effects. We corroborate the functional form using a sample of non-OECD countries. |
| Keywords: | Subjective Well-Being; cohorts; happiness; aging; life-course; OECD; WVS; cross-national; life satisfaction |
| JEL: | C51 J14 I31 |
| Date: | 2009–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15249&r=hap |
| By: | Bisakha Sen; Stephen Mennemeyer; Lisa C. Gary |
| Abstract: | It has long been posited by scientists that we need to have a better understanding in the role that larger contextual factors – like neighborhood quality and the built environment – may have on the nation’s obesity crisis. This paper explores whether maternal perceptions of neighborhood quality affect children’s bodyweight outcomes, and whether racial and ethnic differences in such perceptions may explain any of the hitherto unexplained gap in bodyweight and obesity prevalence among Whites and minorities. The project uses data from the NLSY79 and the CoNLSY datasets. Results indicate that overall neighborhood quality is not significantly related to children’s bodyweight. However, one particular characteristic, namely whether or not the mother believes there is enough police protection in the neighborhood, is related. Lack of police protection has robust and significant effects on the BMI-percentile of the children, though it has less robust effects on the risk of becoming obese per se. Finally, there are differences in perceptions about adequate police protection in their neighborhood between Whites and minorities which remain after controlling for other socio-economic characteristics like maternal education, family income and family structure. However, these differences play a minor role in explaining part of the gap in bodyweight between White and minority children. |
| JEL: | I1 J13 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14985&r=hap |