Inequality Hurts Happiness
Inequality Hurts Happiness

Summary/Abstract: Income inequality and its potential effect on human wellbeing is one of the key research areas in social science. Likewise, there is a lively debate about the optimal degree of government intervention to ensure wellbeing of citizens. The paper investigates impact of inequality and welfare on happiness in a panel of West European countries from 1970 to 2002, taking into account both individual and country-level variables. The results suggest that inequality hurts our wellbeing. Welfare states are happier than countries with limited welfare. Public policy implications are discussed.

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