Adrian de la Garza (Yale University) Atsushi Sannabe (Kyoto University) Katsunori Yamada () (Japan Society for the Promotion of Science and Osaka University)
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This paper utilizes survey data of Japanese union workers to pro- vide new insights to the "happiness and economics" literature. A cru- cial item that distinguishes our empirical analyses from previous stud- ies is the use of data on workers' expectations of their peers' wages. With our data, we con rm that individuals report higher levels of subjective well-being (SWB) when they perceive that their wages are higher relative to their peers'. On the other hand, the traditional ap- proach in the literature constructs relative wages from Mincer equa- tions, thus presuming that individuals infer their peers' wages the way econometricians do. We argue that this method may be inappropriate. Moreover, we address the issue of endogeneity of our subjective refer- ence income measure employing an instrumental variables approach, and corroborate the causality from relative income to SWB. Addition- ally, we study the relationship between SWB measures and workers' individual characteristics, and compare our results with standard nd- ings in the literature for U.S. and European workers. In agreement with these studies, women and married individuals seem to be happier than their counterparts, men and single workers. However, we observe a U-shaped relationship between education and happiness, which con- trasts with ndings for U.S. and British workers. Finally, we attempt to explain these relationships in the context of the Japanese social background.
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Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number
08-10.
Find related papers by JEL classification: C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models D00 - Microeconomics - - General - - - General J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
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