The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion

Leonardo Becchetti, Riccardo Massari () and Paolo Naticchioni
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Riccardo Massari: Sapienza University of Rome

No 7153, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper identifies and quantifies the contribution of a set of covariates in affecting levels and over time changes of happiness inequality. Using a decomposition methodology based on RIF regression, we analyse the increase in happiness inequality observed in Germany between 1992 and 2007, using the German Socio-Economic Panel (GSOEP) database, deriving the following findings. First, trends in happiness inequality are mainly driven by composition effects, while coefficient effects are negligible. Second, among composition effects, education has an inequality-reducing impact, while the increase in unemployment contributes to the rise in happiness inequality. Third, the increase in average income has a reducing impact on happiness inequality, while the raise in income inequality cannot be considered as a driver of happiness inequality trends. A clear cut policy implication is that policies enhancing education and economic performance contribute to reduce happiness inequality and the potential social tensions arising from it.

Keywords: decomposition methods; happiness inequality; income inequality; education (search for similar items in EconPapers)
JEL-codes: I28 I31 J17 J21 J28 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2013-01
New Economics Papers: this item is included in nep-edu, nep-eur, nep-hap, nep-ltv and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published - published in: Oxford Economic Papers, 2014, 66(2), 419-442

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Related works:
Journal Article: The drivers of happiness inequality: suggestions for promoting social cohesion (2014)
Working Paper: The drivers of happiness inequality: Suggestions for promoting social cohesion (2011)
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