Is Inequality in Subjective Well-Being Meritocratic? Danish Evidence from Linked Survey and Administrative Data

Claus Thustrup Kreiner and Isabel Skak Olufsen
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Claus Thustrup Kreiner: University of Copenhagen, CEBI, CESifo, and CEPR
Isabel Skak Olufsen: University of Copenhagen and CEBI

No 22-10, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)

Abstract: This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background (SEB) and meritocratic inequality due to differences in individual merits such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in wellbeing already in early adulthood, where differences in economic outcomes are not yet visible. At age 18-19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65-85 percent in midlife (age 40-55), where it is also higher than the role of merits in income inequality. The positive conclusions that inequality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity approach.

Keywords: Subjective well-being; inequality; intergenerational mobility (search for similar items in EconPapers)
JEL-codes: D30 D63 I31 J62 (search for similar items in EconPapers)
Pages: 54
Date: 2022-09-05
New Economics Papers: this item is included in nep-eur, nep-hap and nep-ltv
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Citations: View citations in EconPapers (1)

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