The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion

35 Pages Posted: 2 Feb 2013

See all articles by Leonardo Becchetti

Leonardo Becchetti

University of Rome Tor Vergata - Faculty of Economics

Riccardo Massari

University of Rome I

Paolo Naticchioni

University of Rome I; University of Cassino

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: happiness inequality, income inequality, education, decomposition methods

JEL Classification: I31, I28, J17, J21, J28

Suggested Citation

Becchetti, Leonardo and Massari, Riccardo and Naticchioni, Paolo, The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion. IZA Discussion Paper No. 7153. Available at SSRN: https://ssrn.com/abstract=2210793

Leonardo Becchetti (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia, 2
I-00133 Rome
Italy

Riccardo Massari

University of Rome I ( email )

Piazzale Aldo Moro 5
Piazzale Aldo Moro, 5
Roma, Rome 00185
Italy

Paolo Naticchioni

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

University of Cassino ( email )

Cassino
Italy

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