The drivers of happiness inequality: suggestions for promoting social cohesion

L. Becchetti, R. Massari, P. Naticchioni
2013 Oxford Economic Papers  
The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion * 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
more » ... 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. JEL Classification: I31, I28, J17, J21, J28 for their suggestions, as well as the participants to the IZA workshop on redistribution and well-being (Lausanne,
doi:10.1093/oep/gpt016 fatcat:gz3frmuhuzcbpa4dq6ecrdmm4i