The Effect of Income and Wealth on Subjective Well-Being in the Context of Different Welfare State Regimes

In this article, we study the causal effects of two economic standing measures on the subjective well-being of the elderly, as well as the moderating effects of distinct welfare regimes on these relationships. For our analysis, we classify countries into the following welfare regimes: Conservative,...

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Bibliographic Details
Published in:Journal of happiness studies 2021, Vol.22 (1), p.181-206
Main Authors: Dominko, Miha, Verbič, Miroslav
Format: Article
Language:English
Subjects:
Bias
Economics
Economists
Happiness
Income
Life satisfaction
Personality and Social Psychology
Philosophy
Positive Psychology
Postcommunist societies
Quality of Life Research
Research Paper
Social Sciences
Socialism
Wealth
Welfare state
Well being
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Summary:In this article, we study the causal effects of two economic standing measures on the subjective well-being of the elderly, as well as the moderating effects of distinct welfare regimes on these relationships. For our analysis, we classify countries into the following welfare regimes: Conservative, Social-democratic, Mediterranean, and Post-socialist. We address the income endogeneity issue by utilizing the panel structure of our data and instrumenting for income. Our findings show that the significance and strength of the effects of both economic standing measures on life satisfaction are moderated by the institutional context or welfare regime type, which we support by providing several robustness checks. Finally, we make a deeper inquiry into the heterogeneity of the countries classified. After controlling for endogeneity, our results indicate that the relationship between economic standing and life satisfaction is mostly driven by individual countries, which suggests caution when studying the effect of economic standing on subjective well-being.
ISSN:1389-4978
1573-7780
DOI:10.1007/s10902-020-00225-9