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

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  • Andrés Rodríguez-Pose

    () (IMDEA Social Sciences Institute)

  • Kristina Maslauskaite

    (College of Europe, Bruges, Belgium)

Abstract

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.

Suggested Citation

  • Andrés Rodríguez-Pose & Kristina Maslauskaite, 2011. "Can policy make us happier? Individual characteristics, socioeconomic factors, and life satisfaction in Central and Eastern Europe," Working Papers 2011-19, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  • Handle: RePEc:imd:wpaper:wp2011-19
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    References listed on IDEAS

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    1. Diaz-Serrano, Luis & Rodríguez-Pose, Andrés, 2011. "Decentralization, Happiness and the Perception of Institutions," IZA Discussion Papers 5647, Institute for the Study of Labor (IZA).
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    7. Blanchflower, David G; Oswald, Andrew, 2011. "International Happiness," CAGE Online Working Paper Series 39, Competitive Advantage in the Global Economy (CAGE).
    8. 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, July.
    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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    Cited by:

    1. Ręklewski Marek & Ryczkowski Maciej, 2016. "The Polish Regional Labour Market Welfare Indicator and Its Links to Other Well-being Measures," Comparative Economic Research, De Gruyter Open, vol. 19(3), pages 113-132, September.
    2. Asadullah, M. Niaz & Xiao, Saizi & Yeoh, Emile, 2018. "Subjective well-being in China, 2005–2010: The role of relative income, gender, and location," China Economic Review, Elsevier, vol. 48(C), pages 83-101.
    3. Nazim Habibov & Elvin Afandi, 2015. "Pre- and Post-crisis Life-Satisfaction and Social Trust in Transitional Countries: An Initial Assessment," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 121(2), pages 503-524, April.
    4. Sergei Guriev & Ekaterina Zhuravskaya, 2009. "(Un)happiness in Transition," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 143-168, Spring.
    5. repec:prg:jnlpep:v:preprint:id:658:p:1-18 is not listed on IDEAS
    6. Nikolova, Milena, 2016. "Minding the happiness gap: Political institutions and perceived quality of life in transition," European Journal of Political Economy, Elsevier, vol. 45(S), pages 129-148.
    7. repec:rsr:journl:v:65:y:2017:i:2:p:21-41 is not listed on IDEAS
    8. Sujarwoto Sujarwoto & Gindo Tampubolon, 2015. "Decentralisation and Citizen Happiness: A Multilevel Analysis of Self-rated Happiness in Indonesia," Journal of Happiness Studies, Springer, vol. 16(2), pages 455-475, April.
    9. Cristina Bernini & Alessandro Tampieri, 2017. "Urbanization and its Effects on the Happiness Domains," CREA Discussion Paper Series 17-10, Center for Research in Economic Analysis, University of Luxembourg.
    10. Kalenborn, Christine & Lessmann, Christian, 2014. "Regional Income Inequality lowers Life Satisfaction: Evidence from OECD Countries," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100561, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Happiness; Convergence; Easterlin paradox; Institutions; Corruption; Decentralisation; Central and Eastern Europe;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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