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The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion

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  • Becchetti, Leonardo

    () (University of Rome Tor Vergata)

  • Massari, Riccardo

    () (Sapienza University of Rome)

  • Naticchioni, Paolo

    () (University of Rome 3)

Abstract

This paper identifies and quantifies the contribution of a set of covariates in affecting levels and over time changes of happiness inequality. Using a decomposition methodology based on RIF regression, we analyse the increase in happiness inequality observed in Germany between 1992 and 2007, using the German Socio-Economic Panel (GSOEP) database, deriving the following findings. First, trends in happiness inequality are mainly driven by composition effects, while coefficient effects are negligible. Second, among composition effects, education has an inequality-reducing impact, while the increase in unemployment contributes to the rise in happiness inequality. Third, the increase in average income has a reducing impact on happiness inequality, while the raise in income inequality cannot be considered as a driver of happiness inequality trends. A clear cut policy implication is that policies enhancing education and economic performance contribute to reduce happiness inequality and the potential social tensions arising from it.

Suggested Citation

  • Becchetti, Leonardo & Massari, Riccardo & Naticchioni, Paolo, 2013. "The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion," IZA Discussion Papers 7153, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7153
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    Cited by:

    1. Sieds, 2016. "Complete Volume LXX n. 4 2016," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 70(4), pages 1-161, October-D.
    2. Antje Mertens & Miriam Beblo, 2016. "Self-Reported Satisfaction and the Economic Crisis of 2007–2010: Or How People in the UK and Germany Perceive a Severe Cyclical Downturn," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(2), pages 537-565, January.
    3. Andrew E. Clark & Sarah Flèche & Claudia Senik, 2016. "Economic Growth Evens Out Happiness: Evidence from Six Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 405-419, September.
    4. Leonardo Becchetti & Riccardo Massari & Paolo Naticchioni, 2014. "The drivers of happiness inequality: suggestions for promoting social cohesion," Oxford Economic Papers, Oxford University Press, vol. 66(2), pages 419-442.
    5. Yang, Jidong & Liu, Kai & Zhang, Yiran, 2015. "Happiness Inequality in China," MPRA Paper 66623, University Library of Munich, Germany.
    6. Piekalkiewicz, Marcin, 2016. "Money, Social Capital and Materialism. Evidence from Happiness Data," MPRA Paper 70522, University Library of Munich, Germany.
    7. Owen, Ann & Phillips, Anne, 2013. "Education, income, and the distribution of happiness," MPRA Paper 49387, University Library of Munich, Germany.
    8. Antje Mertens & Miriam Beblo, 2016. "Self-Reported Satisfaction and the Economic Crisis of 2007–2010: Or How People in the UK and Germany Perceive a Severe Cyclical Downturn," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(2), pages 537-565, January.
    9. Andrew E. Clark & Sarah Flèche & Claudia Senik, 2016. "Economic Growth Evens Out Happiness: Evidence from Six Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 405-419, September.
    10. Oliver Lipps & Daniel Oesch, 2017. "The Working Class Left Behind? The Class Gap in Life Satisfaction in Germany and Switzerland over the Last Decades," SOEPpapers on Multidisciplinary Panel Data Research 940, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Paolo Li Donni & Juan Rodríguez & Pedro Rosa Dias, 2015. "Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 673-701, March.
    12. Carlos Gradín, 2018. "Explaining cross-state earnings inequality differentials in India: An RIF decomposition approach," WIDER Working Paper Series 024, World Institute for Development Economic Research (UNU-WIDER).
    13. repec:spr:jhappi:v:19:y:2018:i:2:d:10.1007_s10902-016-9835-9 is not listed on IDEAS
    14. repec:spr:soinre:v:132:y:2017:i:1:d:10.1007_s11205-016-1266-9 is not listed on IDEAS
    15. Francesco M. Chelli & Mariateresa Ciommi & Alessandra Emili & Chiara Gigliarano & Stefania Taralli, 2016. "Measuring Local Well-Being: A Comparison Among Aggregative Methods For The Equitable And Sustainable Well-Being," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - Italian Review of Economics, Demography and Statistics, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 70(4), pages 91-102, October-D.
    16. Niimi, Yoko, 2015. "Can happiness provide new insights into social inequality? Evidence from Japan," MPRA Paper 64720, University Library of Munich, Germany.
    17. Michal Brzezinski, 2017. "Diagnosing unhappiness dynamics: Evidence from Poland and Russia," Working Papers 2017-27, Faculty of Economic Sciences, University of Warsaw.
    18. repec:eee:ecmode:v:71:y:2018:i:c:p:247-262 is not listed on IDEAS
    19. Peter Krause, 2015. "Quality of Life and Inequality," SOEPpapers on Multidisciplinary Panel Data Research 765, DIW Berlin, The German Socio-Economic Panel (SOEP).
    20. Tapas Mishra & Mamata Parhi & Raúl Fuentes, 2015. "How Interdependent are Cross-Country Happiness Dynamics?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(2), pages 491-518, June.

    More about this item

    Keywords

    decomposition methods; happiness inequality; income inequality; education;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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