Do Large Governments Decrease Happiness?
AbstractUntil now there was little evidence of the influence of large governments on happiness and when it existed, it was positive. We show that structural government consumption and other measures of long-term government imbalances significantly decrease happiness and life satisfaction in European countries. In some cases there is evidence of an inverted U-shaped relationship between the Government burden and happiness, for which the negative relationship begin just before the median. This evidence may lead European politicians to reject the idea that bigger Governments lead to higher people satisfaction and to win elections. This result is consistent with people valuing (negatively) expectations for future tax increases, macroeconomic imbalances, and austerity.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 54418.
Date of creation: 2014
Date of revision:
Happiness; Life Satisfaction; Government Size; Fiscal Deficits; Public Debt; Europe;
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D60 - Microeconomics - - Welfare Economics - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-22 (All new papers)
- NEP-EEC-2014-03-22 (European Economics)
- NEP-HAP-2014-03-22 (Economics of Happiness)
- NEP-PBE-2014-03-22 (Public Economics)
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