Happiness in Europe : Cross-country differences in the determinants of satisfaction with main activity

Data in the European Community Household Panel are used to analyse the impact on self-reported satisfaction from a number of economic and demographic variables. The paper contributes to the ongoing discussion of the relationship between life satisfaction and income utilizing also the panel property of the data. We find an impact from the level of income only for a group of Southern European countries. For the same group of countries the difference between individual and average change in income has a significant impact on satisfaction. For all countries in the panel we find a significant impact from the change in the individual income situation over the last year. We find a strong impact from changes in labour force status and a strong negative impact on satisfaction from being unemployed and a somewhat weaker impact from being outside the labour force. Further, the level of and change in self-reported health has a strong impact on satisfaction.

Research highlights▶ Big cross-country differences in impact on satisfaction from level of income. ▶ Strong impact from changes in labour market states in cross-country panel data. ▶ Strong impact from changes in individual income situation. ▶ Strong impact from both level of and changes in self-reported health.