Working Paper: CEPR ID: DP12346
Authors: Sergei Guriev; Nikita Melnikov
Abstract: The "transition happiness gap" has been one of the most robust findings in the life satisfaction literature. Until very recently, scholars using various datasets on life satisfaction have shown that residents of post-communist countries were significantly less satisfied with their lives than their counterparts in non-transition countries (controlling for income and other correlates of life satisfaction). The literature has explained this finding by the great macroeconomic instability of 1990s, by a substantial decrease in the quality and accessibility of public goods, by the major increase in inequality, and by the rapid depreciation of pre-transition human capital. All these factors were expected to subside over time --- at least after the post-Great-Recession recovery. In this paper, we consider two most recent datasets -- the third wave of the Life in Transition Survey (administered in 2015-16) and the 2010-2016 waves of the annual Gallup World Poll. We find that by 2016 the transition happiness gap had closed. This "happiness convergence" has taken place both due to a "happiness recovery" in post-communist countries after the Great Recession and due to a decrease in life satisfaction in comparator countries in recent years. We also find that the convergence in life satisfaction was primarily driven by middle-income young educated individuals, regardless of gender.
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Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| transition from planned to market economies (P21) | life satisfaction (I31) |
| recovery in life satisfaction in post-communist countries (P27) | closure of transition happiness gap (P27) |
| decline in life satisfaction in comparator countries (O57) | closure of transition happiness gap (P27) |
| living in a post-communist country (P30) | life satisfaction (I31) |
| macroeconomic conditions (E66) | life satisfaction (I31) |
| government dissatisfaction (D72) | life satisfaction (I31) |
| depreciation of human capital (J24) | life satisfaction (I31) |