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Are more equal societies happier? Subjective well-being, income inequality, and redistribution

  • Tamas Hajdu

    ()

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

  • Gabor Hajdu

    ()

    (Institute for Sociology, Centre for Social Sciences, Hungarian Academy of Sciences)

Using four waves of the European Social Survey, we analyze the association of income inequality and redistribution with subjective well-being. Our results provide evidence that people in Europe are negatively affected by income inequality, while reduction of inequality has a positive effect on well-being. Since we simultaneously estimate the effects of inequality and its reduction, our results indicate that not only the perceived income inequality what influences subjective well-being, but also the process, the extent of redistribution, what lead to that state. These impacts are different in Eastern and Western Europe. Inequality aversion and the positive effect of redistribution seem to be stronger also for less affluent members of the societies and left-wing oriented individuals.

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Paper provided by Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 1320.

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Length: 24 pages
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:has:discpr:1320
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