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Reduction of income inequality and subjective well-being in Europe


  • Hajdu, Tamás
  • Hajdu, Gábor


Using four waves of the European Social Survey (179,273 individuals from 29 countries) the authors analyze the association of reduction of income inequality (redistribution) with subjective wellbeing. Their results provide evidence that people in Europe are negatively affected by income inequality, whereas reduction of inequality has a positive effect on well-being. Since the authors simultaneously estimate the effects of income inequality and its reduction, their results indicate that not only the outcome (inequality), but also the procedure (redistribution) that leads to the outcome influences subjective well-being. The authors argue that living in a country where taxes and transfers reduce income inequality to a greater extent, the poor may feel more protected, and the rich may also feel more generous, which may result in an emotional benefit for them. It is also possible that well-being is associated not only with actual, but also with perceived inequality. The positive effect of redistribution seems to be stronger for less affluent members of the societies and left-wing oriented individuals. The estimations are different in Eastern and Western Europe: In post-communist countries people appear to be harder hit by inequality, whereas the impact of inequality reduction on well-being is higher in the East than in the West.

Suggested Citation

  • Hajdu, Tamás & Hajdu, Gábor, 2014. "Reduction of income inequality and subjective well-being in Europe," Economics Discussion Papers 2014-22, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:201422

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    References listed on IDEAS

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    Cited by:

    1. Gábor Hajdu & Tamás Hajdu, 2016. "The Impact of Culture on Well-Being: Evidence from a Natural Experiment," Journal of Happiness Studies, Springer, vol. 17(3), pages 1089-1110, June.
    2. M. Savioli & R. Patuelli, 2016. "Social capital, institutions and policymaking," Working Papers wp1070, Dipartimento Scienze Economiche, Universita' di Bologna.
    3. Bodo Knoll & Hans Pitlik, 2016. "Who benefits from big government? A life satisfaction approach," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(3), pages 533-557, August.
    4. Ángeles Sánchez-Domínguez & Maria J. Ruiz Martos, 2016. "Europe 2020 Strategy Under the Scope of Life Satisfaction," ThE Papers 16/01, Department of Economic Theory and Economic History of the University of Granada..

    More about this item


    subjective well-being; satisfaction; inequality; redistribution; inequality reduction;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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