Income Satisfaction and Deprivation in Spain

43 Pages Posted: 21 Apr 2007

See all articles by J. Maria Labeaga Azcona

J. Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics

Jose Alberto Molina

University of Zaragoza - Department of Economic Analysis; IZA Institute of Labor Economics

Maria Navarro

Foundation for Applied Economic Research (FEDEA)

Date Written: March 2007

Abstract

The first objective of our paper is to identify the determinants of income satisfaction in Spain, with one of these being relative deprivation, and the second is to measure this relative deprivation, in both monetary and satisfaction terms. To that end, we use data from the eight waves of the Spanish section of the European Community Household Panel (1994-2001). With respect to the first objective, we estimate models for categorical variables in order to test whether subjective satisfaction measures depend on relative deprivation, as well as on other determinants. As for the second objective, we first calculate inequality and polarization indices and then we specifically analyze whether the Spanish tax-benefit system helped to reduce individual deprivation. Our results suggest that the more unequal the income distribution is in a group, the less income satisfied is the individual. Moreover, being unemployed is one of the main determinants of deprivation, although public transfers help to reduce individual deprivation. When we observe the amount of public transfers received, deprivation is reduced up to a certain threshold, beyond which it continues to decline, but at a lower rate.

Keywords: income satisfaction, deprivation, inequality, polarization, Spain

JEL Classification: D31, D63, I31

Suggested Citation

Labeaga Azcona, José Maria and Molina Chueca, Jose Alberto and Navarro, Maria, Income Satisfaction and Deprivation in Spain (March 2007). IZA Discussion Paper No. 2702, Available at SSRN: https://ssrn.com/abstract=981683 or http://dx.doi.org/10.2139/ssrn.981683

José Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics ( email )

Calle Senda del Rey, 11
28040 Madrid
Spain
+34 91 398 7811 (Phone)
+34 91 398 6339 (Fax)

Jose Alberto Molina Chueca (Contact Author)

University of Zaragoza - Department of Economic Analysis ( email )

50005 Zaragoza
Spain

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Maria Navarro

Foundation for Applied Economic Research (FEDEA) ( email )

Jorge Juan 46
Madrid, 28001
Spain

HOME PAGE: http://www.fedea.es/asp/curriculum.asp?id=21

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