Income, Happiness, and the Disutility of Labour
We reexamine the claim that the effect of income on subjective well-being suffers from a systematic downward bias if one ignores that higher income is typically associated with more work effort. We analyze this claim using German panel data, controlling for individual unobserved heterogeneity, and specifying the impact of working hours in a non-monotonic form. Our results suggest that the impact of working hours on happiness is rather small and exhibits an inverse U-shape. We do not find evidence that leaving working hours out of the analysis leads to an underestimation of the income effect.
|Date of creation:||Mar 2009|
|Date of revision:|
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- Clark, Andrew E. & Frijters, Paul & Shields, Michael A., 2007.
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"Neighbors as Negatives: Relative Earnings and Well-Being,"
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10667, National Bureau of Economic Research, Inc.
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- Ada Ferrer-i-Carbonell & Paul Frijters, 2004.
"How Important is Methodology for the estimates of the determinants of Happiness?,"
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- Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
- repec:dgr:kubcen:200769 is not listed on IDEAS
- Pouwels, Babette & Siegers, Jacques & Vlasblom, Jan Dirk, 2008. "Income, working hours, and happiness," Economics Letters, Elsevier, vol. 99(1), pages 72-74, April.
- Booth, Alison L & van Ours, Jan C, 2007.
"Job Satisfaction and Family Happiness: The Part-time Work Puzzle,"
CEPR Discussion Papers
6471, C.E.P.R. Discussion Papers.
- AlisonL. Booth & JanC. vanOurs, 2008. "Job Satisfaction and Family Happiness: The Part-Time Work Puzzle," Economic Journal, Royal Economic Society, vol. 118(526), pages F77-F99, 02.
- Booth, Alison L. & van Ours, Jan C., 2007. "Job satisfaction and family happiness: the part-time work puzzle," ISER Working Paper Series 2007-20, Institute for Social and Economic Research.
- Booth, Alison L. & van Ours, Jan C., 2007. "Job Satisfaction and Family Happiness: The Part-time Work Puzzle," IZA Discussion Papers 3020, Institute for the Study of Labor (IZA).
- Alison L. Booth & Jan C. van Ours, 2007. "Job Satisfaction and Family Happiness: The Part-time Work Puzzle," Department of Economics - Working Papers Series 1000, The University of Melbourne.
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