This post, written by Saamah Abdallah of the new
economics foundation (nef), is part of the Wikiprogress focus on How's Life?
2013 chapter on "Well-being
and the global financial crisis" and or series on Subjective Well-being.
There is a strong perception that the economic crisis has ‘disproportionately hit
those who are already vulnerable’ (European Commission) and has ‘deepened
inequalities’. This month, the European
Foundation for the Improvement of Working and Living Conditions has
published a report
showing that, in several countries in the EU, this growing inequality can be
seen in well-being as well as more traditional metrics such as income
inequality.
The report looks at how subjective well-being changed
between 2007 and 2011 in the 27 countries of the EU over that time. As might be
expected, average life satisfaction in several countries fell significantly, including
in Greece and Estonia, as well as in some Nordic countries such as Sweden and
Finland. But it rose in several other
countries, including the new accession countries (Romania and Bulgaria),
Poland, Spain and Italy. Some countries presented mixed patterns, with some measures
appearing to show increases in well-being, whilst others showed decreases (for
example perceived social exclusion rose in Spain despite increases in life
satisfaction). Overall, the pattern was one of declining well-being on the
majority of measures.
What was more interesting, however, was the differences in
trends when one looked at different population groups within countries. For
example, whilst average life satisfaction did not change in the UK and Ireland,
it fell significantly for those in the bottom income quartile, and rose
significantly for those in the top income quartile. Meanwhile in Spain, Italy and Portugal, the
surprising increase in life satisfaction can only be seen for those in the top
half of the income distribution – there was no increase in life satisfaction
for people in the bottom half of the income distribution. Indeed, overall
happiness fell significantly for those in the second income quartile and
perceived social exclusion rose. Finally, in Greece, despite the brutal
economic crisis, there has been no fall in life satisfaction for those in the
top half of the income distribution. In
contrast, average life satisfaction fell by a whole 1.0 points (on a scale of
1-10) for those in the bottom income quartile.
In summary – the effects of the economic crisis are not
being felt equally in many parts of Europe.
And whilst some people argue that high economic inequality is acceptable
and even desirable because it stimulates effort, it is hard to see a positive side
to growing well-being inequality. You can theoretically argue that people have
chosen to forfeit income in exchange for more free time, for example, but you
can’t argue that people have willingly chosen to have lower well-being. And reducing the well-being of the poorest is
hardly an effective way to increase their motivation, given that it is usually positive emotions that lead to people
being able to improve their situation (according to broaden-and-build theory). Growing well-being inequality is the clearest
manifestation yet of the unfair impact of the economic crisis.
Saamah Abdallah
