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Heterogeneity in subjective wellbeing: An application to occupational allocation in Africa

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  • Falco, Paolo
  • Maloney, William F.
  • Rijkers, Bob
  • Sarrias, Mauricio

Abstract

By exploiting recent advances in mixed (stochastic parameter) ordered probit estimators and a unique longitudinal dataset from Ghana, this paper examines the distribution of subjective wellbeing across sectors of employment. We find little evidence for the overall inferiority of the small firm informal sector relative to the formal salaried sector at the conditional mean. Moreover, the estimated underlying random parameter distributions unveil substantial latent heterogeneity in subjective wellbeing around the central tendency that fixed parameter models cannot detect. All job categories contain substantial shares of both relatively happy and disgruntled workers.

Suggested Citation

  • Falco, Paolo & Maloney, William F. & Rijkers, Bob & Sarrias, Mauricio, 2015. "Heterogeneity in subjective wellbeing: An application to occupational allocation in Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 137-153.
    • Handle: RePEc:eee:jeborg:v:111:y:2015:i:c:p:137-153
    DOI: 10.1016/j.jebo.2014.12.022
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    2. Sarrias, Mauricio, 2016. "Discrete Choice Models with Random Parameters in R: The Rchoice Package," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 74(i10).
    3. Binder, Martin & Blankenberg, Ann-Kathrin, 2021. "Self-employment and Subjective Well-Being," GLO Discussion Paper Series 744, Global Labor Organization (GLO).
    4. Falco, Paolo & Maloney, William F. & Rijkers, Bob & Sarrias, Mauricio, 2015. "Heterogeneity in subjective wellbeing: An application to occupational allocation in Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 137-153.
    5. Stefano A. Caria & Paolo Falco, 2018. "Does the Risk of Poverty Reduce Happiness?," Economic Development and Cultural Change, University of Chicago Press, vol. 67(1), pages 1-28.
    6. Jaime Lara Lara & Leobardo Pedro Plata Pérez, 2021. "Satisfacción con la vida y condiciones de empleo en México," Economía: teoría y práctica, Universidad Autónoma Metropolitana, México, vol. 55(2), pages 109-126, Julio-Dic.
    7. Thomas Markussen & Maria Fibæk & Finn Tarp & Nguyen Do Anh Tuan, 2018. "The Happy Farmer: Self-Employment and Subjective Well-Being in Rural Vietnam," Journal of Happiness Studies, Springer, vol. 19(6), pages 1613-1636, August.
    8. Brancati, Emanuele & Di Maio, Michele & Rahman, Aminur, 2024. "Finance, informal competition, and expectations: A firm-level analysis," World Development, Elsevier, vol. 173(C).
    9. Jianbo Luo, 2020. "A Pecuniary Explanation for the Heterogeneous Effects of Unemployment on Happiness," Journal of Happiness Studies, Springer, vol. 21(7), pages 2603-2628, October.
    10. Cristian Ortiz & Aldo Salinas & Johanna Alvarado & Viviana Huachizaca, 2024. "How Much are you Willing to Accept for Being Away From Home? Internal Migration and Job Satisfaction Among Formal-Informal Ecuadorian Workers," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 19(4), pages 1829-1857, August.
    11. Thomas Markussen & Maria Fibæk & Finn Tarp & Nguyen Do Anh Tuan, 2018. "The Happy Farmer: Self-Employment and Subjective Well-Being in Rural Vietnam," Journal of Happiness Studies, Springer, vol. 19(6), pages 1613-1636, August.
    12. Falco, Paolo & Haywood, Luke, 2016. "Entrepreneurship versus joblessness: Explaining the rise in self-employment," Journal of Development Economics, Elsevier, vol. 118(C), pages 245-265.
    13. McKay, Andy & Newell, Andrew T. & Rienzo, Cinzia, 2018. "Job Satisfaction among Young Workers in Eastern and Southern Africa: A Comparative Analysis," IZA Discussion Papers 11380, Institute of Labor Economics (IZA).
    14. International Labour Office., 2013. "Global employment trends for youth 2013 : a generation at risk," Global Employment Trends Reports 994816973402676, International Labour Office, Economic and Labour Market Analysis Department.
    15. Antonio Martins-Neto & Nanditha Mathew & Pierre Mohnen & Tania Treibich, 2024. "Is There Job Polarization in Developing Economies? A Review and Outlook," The World Bank Research Observer, World Bank, vol. 39(2), pages 259-288.
    16. Yan Shao & Zhe Yang & Tianjian Yang, 2023. "The Road of Post-Industrialization Transformation in Developing Countries Based on Weighted Markov and Grey Correlation Theory, Taking the Change of Industrial Structure in Heilongjiang Province of Ch," Sustainability, MDPI, vol. 15(10), pages 1-21, May.
    17. Sarah Bridges & Louise Fox & Alessio Gaggero & Trudy Owens, 2013. "Labour Market Entry and Earnings: Evidence from Tanzanian Retrospective Data," Discussion Papers 13/05, University of Nottingham, CREDIT.
    18. Fernández, Cristina & Suecún, Cecilia, 2023. "Automation of the labor force and informality with focus on the Colombian case," Informes de Investigación 21023, Fedesarrollo.
    19. Gustavo Ahumada & Victor Iturra & Mauricio Sarrias, 2020. "We Do Not Have the Same Tastes! Evaluating Individual Heterogeneity in the Preferences for Amenities," Journal of Happiness Studies, Springer, vol. 21(1), pages 53-74, January.
    20. Ms. Louise Fox, 2015. "Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers," IMF Working Papers 2015/102, International Monetary Fund.
    21. Ruut Veenhoven & Felicia Chiperi & Xin Kang & Martijn Burger, 2021. "Happiness and Consumption: A Research Synthesis Using an Online Finding Archive* â€," SAGE Open, , vol. 11(1), pages 21582440209, March.

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    More about this item

    Keywords

    Subjective wellbeing; Mixed ordered probit; Self-employment; Informality; Developing country labor markets; Africa;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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