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Well-Being in Germany: What Explains the Regional Variation?

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  • Johannes Vatter

Abstract

This paper examines regional differences in subjective well-being (SWB) in Germany. Inferential statistics indicate a diminishing but still significant gap between East and West Germany, but also differing levels of SWB within both parts. The observed regional pattern of life satisfaction reflects macroeconomic fundamentals, where labor market conditions play a dominant role. Differing levels of GDP and economic growth have contributed rather indirectly to regional well-being such that the years since the German reunification can be considered as a period of joyless growth. In total, approximately half of "satisfaction gap" between East and West Germany can be attributed to differing macroeconomic conditions. Moreover, the effects of unemployment and income differ in size between regions such that one can assume increasing marginal disutility of unemployment. The comparably high levels of life satisfaction in Northern Germany are driven mostly by couples and go along with significantly higher fertility rates. Overall, we conclude that comparisons of SWB within a single country provide valid information.

Suggested Citation

  • Johannes Vatter, 2012. "Well-Being in Germany: What Explains the Regional Variation?," SOEPpapers on Multidisciplinary Panel Data Research 435, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp435
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    Cited by:

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    2. Homann, Malte & Jensen, Uwe, 2013. "Does better education cause higher income?," HWWI Research Papers 145, Hamburg Institute of International Economics (HWWI).
    3. Ralf Werner Koßmann, 2016. "Effectiveness of Social Capital in the Job Search Process," SOEPpapers on Multidisciplinary Panel Data Research 823, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    Keywords

    Subjective well-being; regional disparities; unemployment; economic growth; fertility rate;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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