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Happiness in Europe: Cross-Country Differences in the Determinants of Subjective Well-Being

Author

Listed:
  • Pedersen, Peder J.

    () (Aarhus University)

  • Schmidt, Torben Dall

    () (University of Southern Denmark)

Abstract

The purpose in the present paper is to use individual panel data in the European Community Household Panel to analyse the impact on self-reported satisfaction from a number of economic and demographic variables. The paper contributes to the ongoing discussion of the relationship between life satisfaction and income. The panel property of the data makes it possible to study also the impact on satisfaction from income changes as well as the impact from acceleration in income and changes in labour market status on changes in satisfaction. A number of demographic variables and individual attitude indicators are also entered into the analysis of both the level of satisfaction and the change in satisfaction from one wave of the survey to the next. We find a strong impact from the level of income in all countries, an impact from change and acceleration in income for a smaller number of countries, a strong impact from most changes in labour market status and finally important effects from a number of demographic variables.

Suggested Citation

  • Pedersen, Peder J. & Schmidt, Torben Dall, 2009. "Happiness in Europe: Cross-Country Differences in the Determinants of Subjective Well-Being," IZA Discussion Papers 4538, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4538
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    References listed on IDEAS

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    1. Mentzakis, Emmanouil & Moro, Mirko, 2009. "The poor, the rich and the happy: Exploring the link between income and subjective well-being," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(1), pages 147-158, January.
    2. Headey, Bruce & Muffels, Ruud & Wooden, Mark, 2004. "Money Doesn’t Buy Happiness… Or Does It? A Reconsideration Based on the Combined Effects of Wealth, Income and Consumption," IZA Discussion Papers 1218, Institute for the Study of Labor (IZA).
    3. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    4. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Money Does Matter! Evidence from Increasing Real Income and Life Satisfaction in East Germany Following Reunification," American Economic Review, American Economic Association, vol. 94(3), pages 730-740, June.
    5. Rafael Di Tella & Robert MacCulloch, 2008. "Happiness Adaptation to Income beyond "Basic Needs"," NBER Working Papers 14539, National Bureau of Economic Research, Inc.
    6. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    7. Bruce Headey & Ruud Muffels & Mark Wooden, 2008. "Money Does not Buy Happiness: Or Does It? A Reassessment Based on the Combined Effects of Wealth, Income and Consumption," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 87(1), pages 65-82, May.
    8. Scoppa Vincenzo & Ponzo Michela, 2008. "An Empirical Study of Happiness in Italy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-23, June.
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    10. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
    11. Mark A. Cohen, 2008. "The Effect of Crime on Life Satisfaction," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages 325-353, June.
    12. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
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    Cited by:

    1. Damiano Fiorillo & Nunzia Nappo, 2014. "Job satisfaction in Italy: individual characteristics and social relations," International Journal of Social Economics, Emerald Group Publishing, vol. 41(8), pages 683-704, August.
    2. Robin Samuel & Andreas Hadjar, 2016. "How Welfare-State Regimes Shape Subjective Well-Being Across Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(2), pages 565-587, November.

    More about this item

    Keywords

    satisfaction; income; labour market status; health;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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