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Life Is Getting Worse in ESS Data: Is This Due to Micro or Macro Factors? Bruges European Economic Research (BEER) Papers 28/November 2013

Preziosi, Nadir (2013) Life Is Getting Worse in ESS Data: Is This Due to Micro or Macro Factors? Bruges European Economic Research (BEER) Papers 28/November 2013. [Policy Paper]

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    Abstract

    In order to evaluate the success of a society, measuring well-being might be a fruitful avenue. For a long time, governments have trusted economic measures, Gross Domestic Product (GDP) in particular, to assess their success. However GDP is only a limited measure of economic success, which is not enough to show whether policies implemented by governments have a positive perceived impact on the people they represent. This paper belongs to the studies of the relationship between measures of well-being and economic factors. More precisely, it tries to evaluate the decrease in happiness and life satisfaction that can be observed in European countries in the 2000-2010 decade. It asks whether this deterioration is mainly due to microeconomic factors, such as income and individual characteristics, or rather to environmental (macroeconomics) factors such as unemployment, inflation or income inequality. Such aggregate factors could impact individual happiness per se because they are related to the perception of an aggregate risk of unemployment or income fall. In order to strengthen this interpretation, this paper checks whether the type of social protection regime existing in different countries mediates the impact of macroeconomic volatility on individual well-being. To go further, adopting the classification of welfare regimes proposed by Esping-Andersen (1990), it verifies whether the decreasing pattern of subjective well-being varies across these regimes. This is partly due to the aggregate social protection expenditure. Hence, this paper brings some additional evidence to the idea that macroeconomic uncertainty has a cost in terms of well-being. More protective social regimes are able to reduce this cost. It also proposes an evaluation of the welfare cost of unemployment and inflation (in terms of happiness and life satisfaction), in each of the different social protection regimes. Finally different measures of well-being, i.e. cognitive, hedonic and eudaimonic, are used to confirm the above mentioned result.

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    Item Type: Policy Paper
    Uncontrolled Keywords: Happiness, Well-Being, Macroeconomics, Social Protection, Welfare Capitalism
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > social policy > general
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > College of Europe (Brugge) > Bruges European Economic Research Papers (BEER)
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 19 Dec 2014 12:01
    Number of Pages: 66
    Last Modified: 19 Dec 2014 12:01
    URI: http://aei.pitt.edu/id/eprint/58624

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