Work

Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries

Year: 2017

Type: article

Abstract: Since Piketty’s Capital in the 21st Century in 2014, scientific interest into the impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction.

Source: Journal of Happiness Studies

DOI: 10.1007/s10902-017-9905-7

Authors: Johan Graafland, Bjorn Lous

Institution: Tilburg University

Language: English

Topic: Income, Poverty, and Inequality

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,490