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Lost in Transition: Life Satisfaction on the Road to Capitalism

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  • Easterlin, Richard A.

    (University of Southern California)

Abstract

In the transition from socialism to capitalism in Eastern Europe life satisfaction has followed the V-shaped pattern of GDP but failed to recover commensurately. In general, increased satisfaction with material living levels has occurred at the expense of decreased satisfaction with work, health, and family life. Disparities in life satisfaction have increased markedly with those hardest hit being the less educated and persons over age 30; women and men have suffered about equally. The asymmetric response of life satisfaction to decreases in GDP in transition countries and increases in GDP in non-transition countries is arguably due to loss aversion.

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  • Easterlin, Richard A., 2008. "Lost in Transition: Life Satisfaction on the Road to Capitalism," IZA Discussion Papers 3409, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3409
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    More about this item

    Keywords

    transition; capitalism; socialism; loss aversion; happiness;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • D60 - Microeconomics - - Welfare Economics - - - General

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