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Income Satisfaction and Deprivation in Spain

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Author Info
José M. Labeaga () (FEDEA and UNED, Madrid)
José Alberto Molina () (University of Zaragoza and IZA)
María Navarro () (FEDEA, Madrid)

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Abstract

The first objective of our paper is to identify the determinants of income satisfaction in Spain, with one of these being relative deprivation, and the second is to measure this relative deprivation, in both monetary and satisfaction terms. To that end, we use data from the eight waves of the Spanish section of the European Community Household Panel (1994-2001). With respect to the first objective, we estimate models for categorical variables in order to test whether subjective satisfaction measures depend on relative deprivation, as well as on other determinants. As for the second objective, we first calculate inequality and polarization indices and then we specifically analyze whether the Spanish tax-benefit system helped to reduce individual deprivation. Our results suggest that the more unequal the income distribution is in a group, the less income satisfied is the individual. Moreover, being unemployed is one of the main determinants of deprivation, although public transfers help to reduce individual deprivation. When we observe the amount of public transfers received, deprivation is reduced up to a certain threshold, beyond which it continues to decline, but at a lower rate.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2702.

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Length: 43 pages
Date of creation: Mar 2007
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Handle: RePEc:iza:izadps:dp2702

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Related research
Keywords: income satisfaction deprivation inequality polarization Spain

Other versions of this item:

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare

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