Is life subjective
Are we really that well? Quality of life is more than just a subjective or objective situation in life –
The people in Germany are more satisfied with their lives than they have been for a long time. This was the message for World Happy Day on March 20, 2017, based on data from the Socio-Economic Panel (SOEP) .1 In the same week, Federal Labor and Social Affairs Minister Andrea Nahles issued a warning on the occasion of the 5th Poverty and Wealth Report, which has meanwhile been adopted by the Federal Cabinet a divided country. The report shows, among other things, that the lower 40% of the income groups did not benefit from the recent increases in real wages and that their real wages in 2015 were lower than in the mid-1990s. The International Monetary Fund (IMF) is also currently calling for Germany to step up its fight against inequality so that citizens from different social classes can participate in growth
For many years there has been a scientific debate about the effect of increasing monetary wealth on subjective well-being. Richard Easterlin3 already stated in the 1970s that above a certain level of prosperity in societies, a further increase in income hardly leads to an increase in well-being. The empirical verification of the validity of this so-called Easterlin paradox not only for the situation in the USA, but also for German society has already been demonstrated for the process of German unity.4 The reasons for this phenomenon are above all that with increasing income the individual demands in a society also increase. Psychologists like Ed Diener have coined the term hedonistic treadmill for this. Since people get used to a better quality of life and then quickly perceive this level as normal, their life satisfaction no longer increases (significantly). Despite growing economic benefits, there is no increase in satisfaction or happiness.5 A recent study that examined the connection between social inequality and individual well-being in 68 countries from 1981 to 2008 found no direct connection, especially for developed societies.6 Figure 1 shows this finding again concisely. In the period since 1984, for which individual income data and subjective satisfaction indicators from SOEP7 are available, the Easterlin paradox is also confirmed for Germany as a whole.
Development of disposable income and general life satisfaction in Germany
Monthly income based on needs-weighted net household income including the rental value of owner-occupied residential property from the previous year. Calculation corrected for repeat survey effects in general life satisfaction.
In parallel to the rise in real income, there has been no corresponding increase in the level of average life satisfaction of the adult population for a long time, initially in western Germany and, since 1990, also in unified Germany. Only after 2005 did the level of life satisfaction increase again in annual steps to a value in Germany as a whole, as it was observed in western Germany at the beginning of the measurements in the mid-1980s. For an increase in overall social satisfaction with life, it is not just the level of income that is important, 8 but primarily the income position in comparison to others
The social scientist Wolfgang Zapf developed the general concept of quality of life as early as the 1980s. According to this, individual well-being can be understood as a constellation of objective living conditions and subjective well-being. With a frequently quoted "Vierfelder-Tafel" 10 he makes it clear that the target state of a society with a high quality of life is the simultaneous coincidence of objectively good living conditions and subjectively perceived well-being. Conceptually and empirically, both the state of dissatisfaction accompanied by objective or material deprivation or disadvantage (deprivation) and well-being are to be found, when both objective and subjective life situations coincide. There are also constellations in which both dimensions fall apart. According to Zapf’s concept, dissonance describes dissatisfaction despite a good objective life situation and the reverse case, namely that bad living conditions go hand in hand with satisfaction, is referred to as adaptation. The diverse empirical research, especially in the area of satisfaction and happiness research, which has grown in importance in recent years, primarily investigated the variation in objective living conditions, 11 whereby, in addition to material objective living conditions, close and diverse social relationships have proven to be particularly important
With the SOEP data it is possible to draw up an annual balance of the quality of life. In 2004, the mean value of life satisfaction was at its lowest level since the all-German SOEP survey in 1990. Unemployment also had an all-time high in the unified Germany, with around 5 million registered unemployed, while the employment and employment rates have risen by 8.2 and .9.7 percentage points rose by 2015.13
As an objective indicator of living conditions, we have chosen the position in the income hierarchy, based on the needs-weighted household net income. Three categories (bad / medium / good) were formed, with “bad” including all persons in the first two income deciles (i.e. those 20% who have the lowest incomes), while “good” includes the top two deciles with the group of 20 % highest net disposable income. In the middle category is the group of those who are positioned in the third to eighth income decile.14 We proceeded analogously on the life satisfaction side. First, due to the right-skewed distribution of the information on the life satisfaction scale with 11 points (from 0 = completely unsatisfied to 10 completely satisfied), we defined the value range 0 to 4 as "unsatisfied" (since the values zero and one are rarely mentioned). The subjective well-being with the scale values 9 and 10 was classified as “very satisfied”. People in the value range 5 to 8 are described as “satisfied or ambivalent”.
The comparison of the quality of life shows that the proportion of the group who is in the top income quintile and also reports a high degree of subjective well-being has increased slightly to just under 6% of the total population (see Table 1). The group of people characterized as dissonant, i.e. people with good objective living conditions but poor subjective well-being, actually hardly plays a role. But even in the lowest income quintile, only a small group reports that they are all in all dissatisfied in life; here, too, the proportion of dissatisfied in 2005 is greater than ten years later. However, the group of those who are in the lowest income quintile has risen but report very satisfied well-being, i.e. according to Zapf’s scheme, they would be assigned to the group of adaptation15. The group of those who can be assigned to one of the bottom four income quintiles and who nonetheless currently express dissatisfaction has also shrunk. According to this approach, the most striking difference lies in the middle income groups, who in 2015 were more often very satisfied than in 2005.
Income position and degree of life satisfaction 2005/2015
|Objective living conditions||Subjective wellbeing|
|Satisfied - ambivalent (5-8)||Dissatisfied|
|Good (9-10 deciles)||4,7/5,9||13,7/13,6||1,0/0,8|
|Medium (3-8 decile)||8,9/12,8||44,7/43,3||6,0/3,9|
|Bad (1-2 decile)||1,8/3,0||15,8/14,6||3,5/2,3|
|A total of||15,3/21,6||74,2/71,4||10,5/7,0|
Relation measure: Spearman’s rho (confidence interval 95%): 2005: 0.2661 (0.2557-0.2931), Spearman’s rho (confidence interval 95%) 2015: 0.1560 (0.1337-0.1714).
Source: SOEP, v32; weighted results.
The relationships between objective living conditions and subjective well-being in this matrix can also be described by a correlation coefficient that fell significantly in 2015 compared to 2005, i.e. the relationship between income position and satisfaction is less strong in 2015 than in 2005. If you take everything together, one can conclude that there has been a decoupling of material objective life situation and subjective evaluations. This may also be one of the reasons why the current debate about social justice and the reference to increasing income polarization show such volatile values between different surveys.16 For at least in comparison to the situation in 2005, the values of subjective well-being are for one's own in the lowest income quintile Living situation has risen and, especially in the middle income groups, the proportion of very satisfied people has risen. One possible reason for this development is probably due to the fact that, in particular, the lower unemployment and around 4 million additional jobs have been responsible for the increase in the subjective quality of life in recent years.17 Because hardly anything has such a negative impact on life satisfaction as unemployment in the own household.18 Table 2 shows the proportion of people with earned income for the individual cells of the quality of life matrix. As expected, the higher the income, the higher the proportion of people in employment. The difference between 2005 and 2015 is interesting because the employment rate has risen sharply, especially for the adaptation group. Although this group has a poor - and in real terms worse - income situation, it obviously increases self-esteem and subjective well-being if part of the total income is generated from one's own labor.
Persons with earned income by income and life satisfaction 2005/2015
|Objective living conditions||Subjective wellbeing|
|Satisfied - ambivalent (5-8)||Dissatisfied|
|Good (9-10 deciles)||62/71||72/76||61/76|
|Medium (3-8 decile)||53/59||55/61||48/46|
|Bad (1-2 decile)||32/47||34/38||29/22|
|A total of||53/61||55/59||43/41|
Source: SOEP, v32; weighted results.
These results on development trends in quality of life by no means rule out the fact that, despite one's own subjective rather positive well-being, the subjectively perceived external assessment of the general situation and the perceived concern about the economic situation in Germany are assessed as pessimistic.19 Both positive and negative sensitivities are used for one's own assessment Interviewed the experts and also the last instance of their truth - objective statistical indicators are better suited for external assessment of the situation.
The contribution reflects the personal opinion of the authors.
- 1 Cf. SOEP analysis by DIW Berlin on World Happy Day on March 20: Life satisfaction in East Germany is catching up, press release from March 17, 2017, http://www.diw.de/de/diw_02.c.242689.de/pressemitteilungen.html?id = diw_01.c.554636.de.
- 2 The IMF advocates greater relief for people in the lower income bracket, http://www.imf.org/en/News/Articles/2017/05/15/mcs05152017-Germany-Staff-Concluding-Statement-of- the 2017 Article IV mission.
- 3 R. A. Easterlin: Does Economic Growth Improve the Human Lot ?, in: P. A. David, M. W. Reder (Eds.): Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz, New York 1974, pp. 89-125.
- 4 R. A. Easterlin, A. C. Plagnol: Life Satisfaction and ecoomic conditions in East and West Germany pre- and post-unification, in: Journal of Economic Behavior & Organization, vol. 68 (2008), pp. 433-444.
- 5 M. Binswanger: The treadmills of happiness: We always have more and do not get happier. What can we do ?, Stuttgart 2016.
- 6 See J. Kelleya, MDR Evans: Societal Inequality and individual subjective well-being: Results from 68 societies and over 200,000 individuals, 1981-2008, in: Social Science Research, 62nd year (2017), H. 1, Pp. 1-23.
- 7 Cf. J. Schupp: 45 years of social reporting and quality of life research in Germany, in: K. U. Mayer (Hrsg.): Gutes Leben oder gute Gesellschaft ?, Halle (Saale) 2017 (forthcoming).
- 8 Cf. G. Felbermayr, M. Battisti, J.-P. Suchta: Life satisfaction and its distribution in Germany: An inventory, in: ifo Schnelldienst, No. 70, 2017, pp. 19-30.
- 9 A. Clark et al .: An Explanation for the Easterlin Paradox and Other Puzzles, in: Journal of Economic Literature, Volume 46 (2008), No. 1, pp. 95-144; S. Schneider, J. Schupp: Individual Differences in Social Comparison and its Consequences for Life Satisfaction, in: Social Indicators Research, 115th Jg. (2014), H. 2, pp. 767-789.
- 10 W. Glatzer, W. Zapf (Ed.): Quality of life in the Federal Republic. Objective living conditions and subjective well-being, Frankfurt a.M., New York 1984, p. 25.
- 11 Cf. for example P. Dolan, T. Peasgood, M. White: Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being, in: Journal of Economic Psychology, 29th Jg. (2008), H. 1, pp. 94-122; and A. J. Oswald, S. Wu: Objective Confirmation of Subjective Measures of Human Well-Being: Evidence from the U.S.A., in: Science, 327th Jg. (2010), No. 5965, pp. 576-579.
- 12 See E. Diener, S. Oishi, R. E. Lucas: National Accounts of Subjective Well Being, in: American Psychologist, Vol. 70 (2015), no. 3, pp. 234-242.
- 13 Federal Employment Agency: The Labor Market in Figures 2005 to 2015, April 2016, https://statistik.arbeitsagentur.de/Statischer-Content/Arbeitsmarktberichte/jahresbericht-Arbeitsmarkt-Deutschland/Generische-Publikationen/Rueckblick-2005-2015.pdf.
- 14 people in this middle category are often also members of the middle class, whereby the relative share of middle incomes was kept constant in the selected definition. For an alternative presentation see MM Grabka, J. Goebel, C. Schröder, J. Schupp: Shrinking share of middle income earners in the USA and Germany, in: DIW Wochenbericht, 83rd year (2016), no.18, Pp. 391-402.
- 15 It cannot be ruled out that due to the slight increase in purchasing power of the bottom 40% of income earners from 2005 onwards, their income situation did not change relatively, but increased from the purchasing power level.
- 16 See the monthly survey data as part of the ARD DeutschlandTREND by Infratest dimap, https://www.tagesschau.de/inland/deutschlandtrend-739.pdf.
- 17 Cf. L. Winkelmann, R. Winkelmann: Why Are the Unemployed So Unhappy? Evidence from Panel Data, in: Economica 65th Jg. (1998), H. 257, pp. 1-15; H. Welsch, J. Kühling: How Has the Crisis of 2008-2009 Affected Subjective Well-Being? Evidence from 25 OECD Countries, in: Bulletin of Economic Research, 68th vol. (2016), H. 1, pp. 34-54.
- 18 C. v. Scheve, F. Esche, J. Schupp: The Emotional Timeline of Unemployment: Anticipation, Reaction, and Adaptation, in: Journal of Happiness Studies (online first), 2016, DOI: 10.1007 / s10902-016-9773-6.
- 19 See e.g. M. Fratzscher: Satisfaction and Inequality, in: Frankfurter Allgemeine Zeitung from April 6, 2017; as well as the reply by R. Schöb: Satisfied and dissatisfied at the same time, in: Frankfurter Allgemeine Zeitung of April 25, 2017.
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