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The value of reunification in Germany; An analysis of changes in life satisfaction?

Listed author(s):
  • Paul Frijters
  • Michael A. Shields
  • John P. Haisken-DeNew

    (School of Economics and Finance, Queensland University of Technology)

This paper investigates the patterns and determinants of life satisfaction in Germany following reunification. We implement a new fixed-effect estimator for ordinal life satisfaction in the German Socio-Economic Panel and find negative effects on life satisfaction from being recently fired, losing a spouse through either death or separation and time spent in hospital, whilst we find strong positive effects from income and marriage. Using a new causal decomposition technique, we find that East Germans experienced a continued improvement in life satisfaction to which increased household incomes contributed around 12 percent. Most of the improvement is explained by better average circumstances, such as greater political freedom. For West Germans, we find little change in average life satisfaction over this period

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File URL: http://www.bus.qut.edu.au/paulfrijters/documents/ShieldsJHRfinalversiongeneralsatisfaction.doc
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Paper provided by School of Economics and Finance, Queensland University of Technology in its series Paul Frijters Discussion Papers with number 2004-6.

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Date of creation: 15 Jun 2004
Handle: RePEc:qut:pfrijt:2004-6
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Web page: http://www.bus.qut.edu.au/faculty/economics/
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  16. Frijters, Paul, 2000. "Do individuals try to maximize general satisfaction?," Journal of Economic Psychology, Elsevier, vol. 21(3), pages 281-304, June.
  17. Shields, Michael A & Wailoo, Allan, 2002. "Exploring the Determinants of Unhappiness for Ethnic Minority Men in Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(4), pages 445-466, September.
  18. 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.
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