Adaptation to Income over Time: A Weak Point of Subjective Well-Being

This article holds the view that intertemporal comparisons of subjective well-being measures are only meaningful when the underlying standards of judgment are unaltered. This is a weak point of such measures. The study investigates the change in the satisfaction judgments resulting from adaptation to income over time. Adaptation is defined to be desensitization (sensitization) to the hedonic effect of income resulting from an upward (downward) adjustment of the standards. A framework is introduced that provides empirical estimates for the rate of adaptation using data from the Socio-Economic Panel Study (SOEP).Adaptation, financial satisfaction, subjective well-being, standards of judgment

What (If Anything) Do Satisfaction Scores Tell Us about the Intertemporal Change in Living Conditions

This paper looks at the information content of satisfaction scores. It is argued that the information content depends on the extent to which people adapt to living conditions in general. Using data from the German Socio-Economic Panel Study (SOEP), the estimation of a dynamic panel data model provides evidence that adaptation takes place within a relatively short window of time: changes in living conditions are, for the most part, absorbed by an adjustment of the adaptation level within one year. This leads to the conclusion that the information content of satisfaction scores accentuates recent changes in living conditions. Remote changes are notcaptured by the according survey questions, even if these changes have long-term impact on living conditions. The usefulness of satisfaction scores as an indicator of people's living conditions is discussed.adaptation, dynamic panel data model, subjective well-being, satisfaction

Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men

Posner (1995) proposes the redistribution of health spending from old women to old men to equalize life expectancy. His argument is based on the assumption that the woman's utility is higher if her husband is alive. Using self-reported satisfaction measures from a long-running German panel survey, the Socio-Economic Panel Study (SOEP), the present study conducts an empirical test of this assumption. Our matching-based estimation reveals satisfaction trajectories of women who experience the death of their spouse and identifies the causal effect of widowhood. The average level of satisfaction in a control group of non-widowed women serves as a reference to measure the degree of adaptation to widowhood. The results suggest bereavement has no enduring effect on satisfaction, and that is evidence against Posner's assumption.widowhood, adaptation, subjective well-being, life satisfaction, satisfaction with household income, propensity score matching

Working hours mismatch and well-being: comparative evidence from Australian and German panel data

This study uses subjective measures of well-being to analyze how workers perceive working hours mismatch. Our particular interest is in the question of whether workers perceive hours of underemployment differently from hours of overemployment. Previous evidence on this issue is ambiguous. We call attention to the level of well-being in the absence of hours mismatch that serves as a reference state for comparison purposes and to the consequences of restrictive functional form assumptions. Using panel data from Australia and Germany, this study estimates the relationship between working hours mismatch and well-being as a bivariate smooth function of desired hours and mismatch hours by tensor product p-splines. The results indicate that well-being is highest in the absence of hours mismatch. In general, the perception of overemployment is statistically significantly different from the perception of underemployment in both countries. In Australia, workers tolerate some underemployment, as their well-being tends to be unaltered in the presence of short hours of underemployment. However, the marginal loss from underemployment appears to be larger than that from overemployment once the mismatch exceeds approximately ten hours. In Germany, on the contrary, underemployment is clearly more detrimental for well-being than overemployment. German males with preferences for full-time hours hardly respond to overemployment

Arbeitslosigkeit und Alterssicherung : der Einfluss früherer Arbeitslosigkeit auf die Höhe der gesetzlichen Altersrente (Unemployment and old-age provision : the impact of previous unemployment on the level of the state old-age pension)

"Reductions in the state old-age pension which result from previous periods of unemployment are estimated on the basis of an econometric model whose starting point is the human capital theory. It is possible to differentiate between two negative effects on pensions. Firstly, as the state old-age pension depends on lifetime earnings there is a compensation for years with no earnings, e.g. periods of unemployment. Nevertheless this compensation leads to reduced pension entitlements compared with continuous employment. Secondly, the depreciations of human capital and the missing professional experience cause a deterioration of earnings after re-entry to employment. Empirical findings show that the losses are larger than has so far been assumed in example calculations and are particularly severe for relatively short employment biographies." (Author's abstract, IAB-Doku) ((en))Alterssicherung, Arbeitslosigkeit - Auswirkungen, Humankapitalansatz, Lohnhöhe, Berufsverlauf, Rentenhöhe

Zufriedenheit mit der Altersvorsorge und Präferenzen für alternative Sicherungsmodelle : Empirische Analysen mit dem Sozio-oekonomischen Panel (SOEP)

Mit Daten des Sozio-oekonomischen Panels für das Jahr 2002 wird gezeigt, dass die jüngere Generationmit ihrer finanziellen Alterssicherung deutlich unzufriedener ist als die ältere. Dieser Effekt ist unabhängig von der ökonomischen Situation der Befragten, weist also darauf hin, dass es grundsätzliche Unterschiede zwischen den Generationen gibt. Für das Jahr 1992 konnte dieser Effekt nicht nachgewiesen werden.Während eine geschlossene Erwerbsbiographie einen positiven Einfluss auf die Zufriedenheit hat, wirken sich Perioden von Arbeitslosigkeit sowie unsichere Zukunftserwartungen negativ aus. Trotz der deutlich gestiegenen Unzufriedenheit mit der Alterssicherung stehen große Teile der Bevölkerung einer privatwirtschaftlich organisierten Altersvorsorge skeptisch gegenüber. Ganz allgemein kann gezeigt werden, dass mit ihrer Alterssicherung Unzufriedene dem Staat größeres Vertrauen entgegenbringen. Die meisten Befragten halten staatliche Zuschüsse für die private Altersvorsorge zwar für wichtig, die Anreize scheinen aber nicht ausreichend zu sein, um breite Bevölkerungsschichten zum Aufbau einer hinreichenden Privatvorsorge zu bewegen. Diese ist vielmehr deutlich von den finanziellen Möglichkeiten der Befragten geprägt.Using data from the German Socio-Economic Panel Study 2002, we show that satisfaction with the German public pension system is significantly lower in the younger generation. This effect is independent from the individual economic situation and cannot be observed in earlier years.Whereas long periods of full time employment increase satisfaction with old-age security, unemployment has a significant negative impact. In spite of being rather discontented with old-age security, large parts of the population are mistrustful of a more comprehensive privatization of old-age pensions. In general, the dissatis- fied tend to prefer a state-organized old-age security. Most respondents consider state subsidies to be important for private old-age security. However, the incentives do not seem to be suitable for broader implementation of private provision

Welfare transitions before and after reforms of the German welfare system

We study state dependence in the German welfare system and compare transition patterns before and after recent reforms of the welfare system (Hartz Reforms). Using data from the German Socio-Economic Panel, we apply dynamic multinomial logit estimators and find that welfare transitions have generally not changed significantly after the reform: the probabilities of welfare entry and welfare exit increased only slightly whereas the probability of welfare persistence declined somewhat. After the reform, welfare persistence and welfare-to-employment transitions of immigrants became more responsive to the labor market situation

The effects of smoking bans on self-assessed health: Evidence from Germany

The 16 German federal states introduced smoking bans on different dates during 2007 and 2008. These bans restricted smoking in enclosed public places, particularly in restaurants and bars. This study examines the effects of smoking bans on self-assessed health. Using data from the Socio-Economic Panel (SOEP), difference-in-differences estimations provide evidence for health improvements for the population at large. Health benefits from the secondhand smokefree environment are equivalent to an increase in household income of approximately 30%. Further subgroup analyses show that health improvements are largest among young non-smokers (below 30 years) whereas smokers report no or even adverse health effects in response to bans. Exploiting differences in the dates of introduction and enforcement, we find no evidence that the effects of bans depend on enforcement measures