EconPapers    
Economics at your fingertips  
 

Money and Happiness: Evidence from the Industry Wage Structure

Jorn-Steffen Pischke

No 8409, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: There is a well-established positive correlation between life-satisfaction measures and income in individual level cross-sectional data. This paper attempts to provide some evidence on whether this correlation reflects causality running from money to happiness. I use industry wage differentials as instruments for income. This is based on the idea that at least part of these differentials are due to rents, and part of the pattern of industry affiliations of individuals is random. To probe the validity of these assumptions, I compare estimates for life satisfaction with those for job satisfaction, present fixed effects estimates, and present estimates for married women using their husbands' industry as the instrument. All these specifications paint a fairly uniform picture across three different data sets. IV estimates are similar to the OLS estimates suggesting that most of the association of income and well-being is causal.

Keywords: Life satisfaction; Well-being (search for similar items in EconPapers)
JEL-codes: D1 J31 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-hap
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60) Track citations by RSS feed

Downloads: (external link)
https://cepr.org/publications/DP8409 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Money and Happiness: Evidence from the Industry Wage Structure (2011) Downloads
Working Paper: Money and Happiness: Evidence from the Industry Wage Structure (2011) Downloads
Working Paper: Money and Happiness: Evidence from the Industry Wage Structure (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:8409

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP8409

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2023-07-05
Handle: RePEc:cpr:ceprdp:8409