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Can policy make us happier? Individual characteristics, socioeconomic factors, and life satisfaction in Central and Eastern Europe

  • Andrés Rodríguez-Pose

    (Department of Geography and Environment, London School of Economics (LSE); IMDEA Social Sciences, Madrid; Department of European Economic Studies, College of Europe)

  • Kristina Maslauskaite

    (Notre Europe)

In the last decade, Central and Eastern European (CEE) countries have witnessed a rapid economic convergence vis-à-vis Western Europe. However, this rapid growth has not been matched by a similarly rapid increase in life satisfaction, which has remained low in the European context. This paper sets out to address this conundrum, by looking at the individual and macro-level determinants of individual life satisfaction in ten CEE countries. The results highlight that while Central and Eastern Europeans share the same individual determinants of happiness as people in the West (despite some significant cross-country variation), macroeconomic and institutional differences are the key factors behind the lack of convergence in life satisfaction. On the macroeconomic side, GDP growth is still a source of increasing well-being, but the happiness bonus associated with it is becoming smaller. The different levels of individual happiness in CEE are therefore mostly determined by institutional factors such as corruption, government spending and decentralisation, making policies aimed at enhancing institutional quality capable of bringing about substantial improvements in the overall life satisfaction of the people in the region.

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File URL: https://www.coleurope.eu/system/files_force/research-paper/beer22.pdf?download=1
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Paper provided by European Economic Studies Department, College of Europe in its series Bruges European Economic Research Papers with number 22.

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Length: 33 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:coe:wpbeer:22
Contact details of provider: Postal: Dijver 11, B-8000 Brugge
Web page: http://www.coleurope.eu
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  1. DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001. "Preferences over inflation and unemployment: Evidence from surveys of happiness," ZEI Working Papers B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
  2. Díaz Serrano, Lluís & Rodríguez Pose, Andrés, 2011. "Decentralization, happiness and the perception of institutions," Working Papers 2072/151812, Universitat Rovira i Virgili, Department of Economics.
  3. Luis Diaz-Serrano & Andrés Rodríguez-Pose, 2011. "Decentralization, happiness and the perception of institutions," Working Papers 2011-07, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  4. Orsolya Lelkes, 2005. "Knowing what is good for you: Empirical analysis of personal preferences and the 'objective good'," CASE Papers 094, Centre for Analysis of Social Exclusion, LSE.
  5. Guriev, Sergei & Zhuravskaya, Ekaterina, 2009. "(Un)Happiness in Transition," CEPR Discussion Papers 7258, C.E.P.R. Discussion Papers.
  6. Stefan Voigt & Lorenz Blume, 2009. "The Economic Effects of Federalism and Decentralization – A Cross-Country Assessment," MAGKS Papers on Economics 200905, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  7. Kaisa Kotakorpi & Jani-Petri Laamanen, 2010. "Welfare State and Life Satisfaction: Evidence from Public Health Care," Economica, London School of Economics and Political Science, vol. 77(307), pages 565-583, 07.
  8. Frijters, Paul & Beatton, Tony, 2012. "The mystery of the U-shaped relationship between happiness and age," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 525-542.
  9. Heinz Welsch, 2008. "The welfare costs of corruption," Applied Economics, Taylor & Francis Journals, vol. 40(14), pages 1839-1849.
  10. Jan Ott, 2010. "Good Governance and Happiness in Nations: Technical Quality Precedes Democracy and Quality Beats Size," Journal of Happiness Studies, Springer, vol. 11(3), pages 353-368, June.
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