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on Economics of Happiness |
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Issue of 2020‒06‒08
seven papers chosen by |
| By: | Jenkins, Stephen P. |
| Abstract: | To compare distributions of ordinal data such as individuals’ responses on Likert-type scale variables summarizing subjective well-being, we should not apply the toolbox of methods developed for cardinal variables such as income. Instead we should use an analogous toolbox which takes account of the ordinal nature of the responses. This paper reviews these methods and introduces a new Stata command ineqord for undertaking distributional comparisons. As the empirical illustrations demonstrate, ineqord can be used for dominance checks as well as for estimation of indices of polarization and inequality. |
| Keywords: | inequality; ordinal data; subjective well-being; life satisfaction; annual population survey |
| JEL: | C1 |
| Date: | 2020–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:104564&r=all |
| By: | Milena Nikolova (Institute of Labor Economics (IZA), Bonn, Germany. The Brookings Institution, Washington, DC, USA. Global Labor Organization (GLO).); Boris Nikolaev; Olga Popova |
| Abstract: | We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimation. Our findings suggest that while transitioning from self-employment to salaried employment (i.e., a voluntary selfemployment exit) brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job (i.e., switching from salaried employment to unemployment). Meanwhile, leaving self-employment has no consequences for self-reported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are largely psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even two or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the costs of business failure. |
| Keywords: | entrepreneurship, self-employment, health, well-being, unemployment, job switches |
| JEL: | E24 I10 I31 J28 L26 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:386&r=all |
| By: | Daniel Avdic; Sonja C. de New; Daniel A. Kamhöfer |
| Abstract: | We study the impact of the business cycle on mental wellbeing by linking rich German survey data to over a decade of detailed gross domestic product information. Endogeneity concerns are tackled using a shift-share instrumental variables approach in which exposure to macroeconomic fluctuations is estimated from regional variations in historical industry sector composition. Estimation results reveal strong negative effects of economic downturns on both life satisfaction and a multidimensional measure of mental health. We provide evidence that these effects are mediated by fear of job loss and income reductions, while actual unemployment effects are negligible. A case study of the impact of the global financial crisis reveals that adverse effects on mental wellbeing are persistent and remained even after the economy recovered. |
| Keywords: | Business cycle, mental health, life satisfaction, global financial crisis, shift-share instrument |
| JEL: | C36 E32 I15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1081&r=all |
| By: | Layard, Richard (London School of Economics); Clark, Andrew E. (Paris School of Economics); De Neve, Jan-Emmanuel (University of Oxford); Krekel, Christian (London School of Economics); Fancourt, Daisy (University College London); Hey, Nancy (What Works Centre for Wellbeing); O'Donnell, Gus (House of Lords) |
| Abstract: | It is politicians who have to decide when to release the lockdown, and in what way. In doing so, they have to balance many considerations (as with any decision). Often the different considerations appear incommensurable so that only the roughest of judgements can be made. For example, in the case of COVID-19, one has to compare the economic benefits of releasing the lockdown with the social and psychological benefits, and then compare the total of these with the increase in deaths that would result from an early exit. We here propose a way of doing this more systematically. |
| Keywords: | well-being, COVID-19, lockdown |
| JEL: | H12 I18 I31 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13186&r=all |
| By: | Brodeur, Abel (University of Ottawa); Clark, Andrew E. (Paris School of Economics); Flèche, Sarah (Aix-Marseille University); Powdthavee, Nattavudh (University of Warwick) |
| Abstract: | The COVID-19 pandemic has led many governments to implement lockdowns. While lockdowns may help to contain the spread of the virus, they may result in substantial damage to population well-being. We use Google Trends data to test whether the lockdowns implemented in Europe and America led to changes in well-being related topic search terms. Using differences-in-differences and a regression discontinuity design to evaluate the causal effects of lockdown, we find a substantial increase in the search intensity for boredom in Europe and the US. We also found a significant increase in searches for loneliness, worry and sadness, while searches for stress, suicide and divorce on the contrary fell. Our results suggest that people's mental health may have been severely affected by the lockdown. |
| Keywords: | boredom, COVID-19, loneliness, well-being |
| JEL: | I12 I31 J22 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13204&r=all |
| By: | Abigail Wozniak |
| Abstract: | This paper uses a unique large-scale survey administered in April 2020 to assess disparities on several dimensions of wellbeing under rising COVID-19 infections and mitigation restrictions in the US. The survey includes three modules designed to assess different dimensions of well-being in parallel: physical health, mental and social health, and economic and financial security. The survey is unique among early COVID-19 data efforts in that provides insight on diverse dimensions of wellbeing and for subnational geographies. I find dramatic declines in wellbeing from pre-COVID baseline measures across both people and places. Place-level variation is not well explained by local characteristics that either precede or coincide with the pandemic. Analysis by demographic groups also shows large and unequal declines in wellbeing in the COVID era. Hispanic, younger, and lower-earning individuals all faced disproportionately worsening economic conditions, as did those with school-aged children. I conclude that place-based relief policies are unlikely to be efficient relative to support targeted to the neediest individuals. I also find that individual COVID-19 exposure and risk show concerning relationships with employment, protective behavior, and mental health. Those with direct COVID-19 exposure through their households face significantly greater employment loss, but those with recent fever symptoms or elevated risk for COVID complications are not reducing their work hours or taking additional precautions, despite negative mental health status changes indicating concern. These findings suggest that some support policies might be directly targeted to households with confirmed infections. |
| Keywords: | COVID-19; coronavirus |
| JEL: | I1 I15 I18 J10 J15 J38 |
| Date: | 2020–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:87962&r=all |
| By: | Pablo de Pedraza (AIAS, University of Amsterdam and JRC European Commission); Martin Guzi (Masaryk University, CELSI and IZA); Kea Tijdens (AIAS, University of Amsterdam) |
| Abstract: | Di Tella et al. (2001) show that temporary fluctuations in life satisfaction (LS) are correlated with macroeconomic circumstances such as gross domestic product, unemployment, and inflation. In this paper, we bring attention to labour market measures from search and matching models (Pissarides 2000). Our analysis follows the two-stage estimation strategy used in Di Tella et al. (2001) to explore sectoral unemployment levels, labour market tightness, and matching efficiency as LS determinants. In the first stage, we use a large sample of individual data collected from a continuous web survey during the 2007-2014 period in the Netherlands to obtain regression-adjusted measures of LS by quarter and economic sector. In the second-stage, we regress LS measures against the unemployment level, labour market tightness, and matching efficiency. Our results are threefold. First, the negative link between unemployment and an employee’s LS is confirmed at the sectoral level. Second, labour market tightness, measured as the number of vacancies per job-seeker rather than the number of vacancies per unemployed, is shown to be relevant to the LS of workers. Third, labour market matching efficiency affects the LS of workers differently when they are less satisfied with their job and in temporary employment. Our results give support to government interventions aimed at activating demand for labour, improving the matching of job-seekers to vacant jobs, and reducing information frictions by supporting match-making technologies. |
| Keywords: | life satisfaction; matching efficiency; tightness; unemployment |
| JEL: | E24 J21 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2020-02&r=all |