Does people’s life satisfaction adapt to material improvements? In a recent paper (gated), Galiani, Gertler and Undurraga find that it does, even in a case of very poor people receiving a really basic service (housing). In a large-scale experiment, some poor households in El Salvador, Mexico and Uruguay were randomly selected to receive a ready-made small house. Receiving such housing increased the share of households reporting to be “satsfied” or “very satisfied” with the quality of their life by around around 40 %, from 0.53 to 0.73, thus confirming that it was something these households really needed. What about the effect in the long term? Eight months later, more than half of the gain had disappeared, highly consistent with the hedonic treadmill hypothesis.
Two papers in The Economic Journal November 2014 deal with how childhood information may predict adult outcomes.
Frijters, Johnston and Shields consider the question Does Childhood Predict Adult Life Satisfaction? Using repeated surveys of people born in the UK in 1958, they are able to explain only 7 % of people’s adult life satisfaction with a very wide range of family and childhood variables. Interestingly, exploiting the panel dimension, they estimate that around 40 % of adult life satisfaction is a trait (i.e. fixed), so it is surprising that their first number is so low. It is as if type of childhood almost does not matter. Education and wages are predicted much better.
I do not know if information on time preferences would have helped, but Golsteyn, Grönqvist and Lindahl at least claim that Adolescent Time Preferences Predict Lifetime Outcomes in their article in the same issue. They find that Swedes who were future-oriented (had low discount rates) as children went on to obtain more education, better grades, higher incomes, and better health (obesity and mortality) as adults than their more impatient peers. The authors are admirably clear that they are not estimating causal effects.
Many reported the paper on smart phones and child injuries by Craig Palsson the previous days. The finding is that the construction of 3G networks in US cities may have lead to increased use of smartphones, less supervision of children, and more children going to hostpital with injuries. I believe most parents are too restrictive, so I was happy to see the following sentence regarding the welfare effects:
“Even though child injuries should not be taken lightly, some might argue that parents were oversupplying supervision or that injuries help build character, and therefore the smartphone-induced injures are welfare enhancing.”
Though I would rather call it a sign that the children are more physically active, which is good for both body and brain, as shown by a recent RCT. And as I have written about before, children tend to be very active during self-organized play.
Chetty, Saez and Sandor have experimented on the referees of the Journal of Public Economics. They find that somewhat unsurprisingly that shorter deadlines, cash incentives and social incentives make referees faster. Further, cash does not crowd out intrinsic motivation, report quality is unaffected, and spillovers on other referee activites are small or nonexistent. They do note that “[O]f course, referees must forego or postpone some activity to prioritize submitting referee reports. The social welfare impacts of our treatments depend on what activities get displaced.” To the extent that it is just procrastination that is crowded out, the conclusions could be even more positive.
Conrad Miller from MIT finds in his job market paper that US affirmative action regulation introduced from 1979 onwards had substantial effect on the black share of employees, also after deregulation. The exogenous variation comes from “changes in employers’ status as a federal contractor” and the fact that it was only federal contractors who were subject to these regulations. To get at the full dynamic effect of the regulation, Miller does not stop at comparing employers when they switch contractor status, but exploits also variation in when the firms are contractors for the first or the last time. In this way he can estimate whether there is a (persistent) causal effect also after a firm has lost his status as a federal contractor (has become “deregulated”).
The event study results are striking:
The effect is quite small – becoming a contractor on average increases an establishment’s black share of around 0.15 percentage points per year – but the key point is that it persists, even when the firm is no longer is a contractor. There is much more in the paper, including a proposed explanation in terms of employers being induced to improve their screening procedures for potential employees.
Religious beliefs have been associated with happiness, but psychologists Shariff and Aknin (PLOS ONE) take a more disaggregated look:
They construct life satisfaction and daily affect measures from the Gallup World Poll and put it together with country-level beliefs in Heaven and Hell from the World Values Survey and the European Values Survey. Believing in Heaven is associated with greater well-being, believing in Hell with lower. This cross-national comparison shows the relationship between aggregate measures of daily well-being and “the percentage of population that believes in Heaven minus percentage that believes in Hell”:
There are also some regression results controlling for some things.
What is the causality? Shariff and Aknin also conduct an experiment on Amazon’s Mechanical Turk: People primed to think of Hell by writing a short paragraph about it reported lower happiness and positive emotions and higher sadness, fear and negative emotions afterwards compared to people writing about Heaven or an unrelated topic. The Heaven group or the control group did not differ from each other.
H/t: Kevin Lewis
“Is soccer good for you? The motivational impact of big sporting events on the unemployed” is an article in Economic Letters (ungated) by Philipp Doerrenberg and Sebastian Siegloch at IZA that I believe a lot of people wished they had written. The authors analyze the effect of the Euro Cup and the World Cup on the unemployed in Germany:
We examine the effect of salient international soccer tournaments on the motivation of unemployed individuals to search for employment using the German Socio Economic Panel 1984–2010. Exploiting the random scheduling of survey interviews […] We show that respondents who are interviewed after a tournament have an increased motivation to work but, at the same time, request higher reservation wages. Furthermore, the sporting events increase the perceived health status as well as worries about the general economic situation. We also find effects on the subjective well-being of men.
The unemployed are made more motivated to work and more worried, and to perceive themselves as being healthier, but men’s well-being is decreased. Ht: Kevin Lewis.