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(Un)Happiness in Transition

Author

Listed:
  • Sergei Guriev
  • Ekaterina Zhuravskaya

    (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Despite strong growth performance in transition economies in the last decade, residents of transition countries report abnormally low levels of life satisfaction. Using data from the World Values Survey and other sources, we study various explanations of this phenomenon. First, we document that the disparity in life satisfaction between residents of transition and nontransition countries is much larger among the elderly. Second, we find that deterioration in public goods provision, an increase in macroeconomic volatility, and a mismatch of human capital of residents educated before transition (which disproportionately affects the aged population) explain a great deal of the difference in life satisfaction between transition countries and other countries with similar income and other macroeconomic conditions. The rest of the gap is explained by the difference in the quality of the samples. As in other countries, life satisfaction in transition countries is strongly related to income; but, due to a higher nonresponse of high-income individuals in transition countries, the survey-data estimates of the recent increase in life satisfaction, driven by 10-year sustained economic growth in transition region, are biased downwards. The evidence suggests that if the region keeps growing, life satisfaction in transition countries will catch up with the "normal" level in the near future.

Suggested Citation

  • Sergei Guriev & Ekaterina Zhuravskaya, 2009. "(Un)Happiness in Transition," Post-Print hal-03393405, HAL.
  • Handle: RePEc:hal:journl:hal-03393405
    DOI: 10.1257/jep.23.2.143
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03393405
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    More about this item

    Keywords

    General Welfare; Socialist Systems and Transitional Economies: National Income; Product; and Expenditure; Money; Inflation; Socialist Institutions and Their Transitions: Consumer Economics; Health; Education and Training; Welfare; and Poverty;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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