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Welfare Policy and Subjective Well-Being Across Nations: An Individual-Level Assessment

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Abstract

In the vast and diverse literature on determinants of life-satisfaction and happiness, there is a relative dearth of empirical research on the role of specifically political factors. We identify one such possible factor, the industrial welfare state, and assess its impact on how individuals perceive their well-being. The voluminous literature on the welfare state highlights its position as one of the most profound chapters in the latter-day human experience, but focuses on its indirect effects on well-being through economic and social conditions. We contend that the welfare state exerts a more direct effect to the extent that individuals experience very real impacts on their quality of life. Considering individual responses in 18 industrial democracies from 1981 to 2000, we find that welfare state generosity exerts a positive and significant impact on life-satisfaction and happiness. We discuss implications for further research generated by these findings.

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Notes

  1. The details of the rigorous operationalization are not readily summarized. Perhaps the most succinct description is offered by Messner and Rosenfeld (1997: 1399): the index “encompasses three primary dimensions of the underlying concept: the ease of access to welfare benefits, their income-replacement values, and the expansiveness of coverage across different statuses and circumstances. A complex scoring system is used to assess [the amount of decommodification provided by] the three most important social welfare programs: pensions, sickness benefits, and unemployment compensation. The scoring system reflects the ‘prohibitiveness’ of conditions for eligibility [e.g., means testing], the distinctiveness for and duration of entitlements [e.g., maximum duration of benefits], and the degree to which benefits replace normal levels of earnings. The indices for these three types of...programs are then aggregated into a combined [additive] index.” It should be noted that the individual indices are weighted by the percent of the relevant population covered by the given programs. Each dimensional index is built from multiple indicators (e.g., five for old age pensions, four each for sickness and unemployment) reflecting the concerns noted above. The data can be located at http://www.sp.uconn.edu/~scruggs/wp.htm (accessed 15 April 2005).

  2. Two more recent studies, focusing on unemployment insurance schemes rather than the welfare state…more broadly, come to equally conflicting results: DiTella et al. (2003) find that higher unemployment benefits are “associated with higher national well-being” whereas Ouweneel (2002) maintains that the level of benefits does not buffer the negative effects of unemployment on subjective well-being.

  3. Countries included in our analysis are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

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Authors and Affiliations

  1. Department of Political Science, Texas A&M University, Allen Building, College Station, TX, 77843-4348, USA

    Alexander C. Pacek

  2. Department of Political Science, Notre Dame University, Notre Dame, IN, 46556, USA

    Benjamin Radcliff

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  1. Alexander C. Pacek
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  2. Benjamin Radcliff
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Correspondence to Alexander C. Pacek.

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Pacek, A.C., Radcliff, B. Welfare Policy and Subjective Well-Being Across Nations: An Individual-Level Assessment. Soc Indic Res 89, 179–191 (2008). https://doi.org/10.1007/s11205-007-9232-1

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