Well-Being in Germany: What Explains the Regional Variation?

37 Pages Posted: 28 Apr 2012

See all articles by Johannes Vatter

Johannes Vatter

University of Freiburg - Research Center for Generational Contracts

Date Written: March 1, 2012

Abstract

This paper examines regional differences in subjective well-being (SWB) in Germany. Inferential statistics indicate a diminishing but still significant gap between East and West Germany, but also differing levels of SWB within both parts. The observed regional pattern of life satisfaction reflects macroeconomic fundamentals, where labor market conditions play a dominant role. Differing levels of GDP and economic growth have contributed rather indirectly to regional well-being such that the years since the German reunification can be considered as a period of joyless growth. In total, approximately half of "satisfaction gap" between East and West Germany can be attributed to differing macroeconomic conditions. Moreover, the effects of unemployment and income differ in size between regions such that one can assume increasing marginal disutility of unemployment. The comparably high levels of life satisfaction in Northern Germany are driven mostly by couples and go along with significantly higher fertility rates. Overall, we conclude that comparisons of SWB within a single country provide valid information.

Keywords: subjective well-being, regional disparities, unemployment, economic growth, fertility rate

JEL Classification: R10, I31

Suggested Citation

Vatter, Johannes, Well-Being in Germany: What Explains the Regional Variation? (March 1, 2012). SOEPpaper No. 435, Available at SSRN: https://ssrn.com/abstract=2046921 or http://dx.doi.org/10.2139/ssrn.2046921

Johannes Vatter (Contact Author)

University of Freiburg - Research Center for Generational Contracts ( email )

Bertoldstrasse 17
Freiburg, 79098
Germany

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