Subjective well-being and life events

Tineke de JongeNew Directions in Welfare Congress, Paris, 7 July 2011

Short history measurement SWB in the Netherlands

• First Quality of Life Survey: 1974• Domain specific questions

How satisfied are you with your life?

Do you consider yourself happy?

• Two general subjective questions:

How satisfied are you with your life?

Do you consider yourself happy?

0

10

20

30

40

50

60

70

80

90

100

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

% population 12 yrs and older Happy Satisfied

Short history measurement SWB in the Netherlands

How satisfied are you with your life?

• Extraordinarily satisfied

• Very satisfied

• Satisfied

• Fairly satisfied

• Not very satisfied

Do you consider yourself happy?

• Very happy

• Happy

• Neither happy nor unhappy

• Not very happy

• Unhappy

Theories on well-being

Standard assumption in economics: Higher income higher level of well-being

SWB should go up or down with income rise or fall

Adaptation based theories: Major life events affect subjective well-being

SWB returns to normal after a period of adaptation

Social Statistical Database (SSD)

SSD

Civil register

Labour force survey

EU-SILC

Income register

Employment register

Unemployment register

Dataset for analyses

• Pooled survey data 2001 - 2008

• 59,000 respondents of 20 years and older

• Enriched with data Social Statistical Database Income shocks Life events

Higher income comes with greater happiness

Income shocks

Data for analyses• Yearly disposable household income ‘03-’08 from SSD• Price level 2008• 36,000 respondents

Income shocks

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Decrease morethan 15%

Decrease between5% and 15%

Change between -5% and +5%

Increase between5% and 15%

Increase more than15%

% respondents in income class

< € 10.000

€ 10.000 - € 20.000

€ 20.000 - € 30.000

€ 30.000 - € 40.000

€ 40.000 - € 50.000

>= € 50.000

Total

Income class

Size of income shock

The effect of income shocks on SWB

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< -35% -35% to-25%

-25% to-15%

-15% to-5%

-5% to5%

5% to15%

15% to25%

25% to35%

> 35% < -35% -35% to-25%

-25% to-15%

-15% to-5%

-5% to5%

5% to15%

15% to25%

25% to35%

> 35%

Income shock present year or year before

% happy people % satisfied people

Life events from SSD• Change in marital status

Marrying

Divorcing

Being widowed

• Change in socio-economic status

Starting to work

Becoming dependent on benefits

(unemployment/disability)

Becoming a pensioner

Adaptation to changed circumstances

Number of life events in SSD

< 1

yr

< 1

yr

< 1

yr

< 1

yr

< 1

yr

< 1

yr

1 to

2 y

rs

1 to

2 y

rs

1 to

2 y

rs

1 to

2 y

rs

1 to

2 y

rs

1 to

2 y

rs

2 to

3 y

rs

2 to

3 y

rs

2 to

3 y

rs

2 to

3 y

rs

2 to

3 y

rs

2 to

3 y

rs

3 to

4 y

rs

3 to

4 y

rs

3 to

4 y

rs

3 to

4 y

rs

3 to

4 y

rs

3 to

4 y

rs

4 to

5 y

rs

4 to

5 y

rs

4 to

5 y

rs

4 to

5 y

rs

4 to

5 y

rs

4 to

5 y

rs5 to

8 y

rs

5 to

8 y

rs

5 to

8 y

rs

5 to

8 y

rs

5 to

8 y

rs

5 to

8 y

rs

0

250

500

750

1.000

1.250

1.500

1.750

2.000

2.250

2.500

2.750

3.000

3.250Number of respondents

0

10

20

30

40

50

60

70

80

90

100

< 1 1 to 2 2 to 3 3 to 4 4 to 5 5 to 8

% Happy persons

Married

Divorced

Widowed

No change

Share of happy people after life event

Years past since life event

0

10

20

30

40

50

60

70

80

90

100

5 to 8 4 to 5 3 to 4 2 to 3 1 to 2 < 1 < 1 1 to 2 2 to 3 3 to 4 4 to 5 5 to 8

% Happy persons

Married

Divorced

Widowed

No change

A change in marital status and SWB

Years before life-event Years after life-event

Life event

0

10

20

30

40

50

60

70

80

90

100

5 to 8 4 to 5 3 to 4 2 to 3 1 to 2 < 1 < 1 1 to 2 2 to 3 3 to 4 4 to 5 5 to 8

% Happy persons (dashed: % satisfied)

Married

Divorced

Widowed

No change

A change in marital status and SWB

Years before life-event Years after life-event

Life event

0

10

20

30

40

50

60

70

80

90

100

5 to 8 4 to 5 3 to 4 2 to 3 1 to 2 < 1 < 1 1 to 2 2 to 3 3 to 4 4 to 5 5 to 8

% Happy persons (dashed: % satisfied)

Worker

Recipient

Pensioner

No change

A change in socio-economic status and SWB

Years before life-event Years after life-event

Life event

0

10

20

30

40

50

60

70

80

90

100

5 to 8 4 to 5 3 to 4 2 to 3 1 to 2 < 1 < 1 1 to 2 2 to 3 3 to 4 4 to 5 5 to 8

% Happy persons (dashed: % satisfied)

Worker

Recipient

Pensioner

No change

A change in socio-economic status and SWB

Years before life-event Years after life-event

Life event

Conclusions

• People adapt to circumstances• Our data contain meaningful information• Happiness and satisfaction are assessed differently• People react differently to various types of life events

• Changes in SWB are more likely due to life events than to income shocks

Thank you for your attention!