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Title:The Value of Reunification in Germany: An Analysis of Changes in Life Satisfaction PDF Logo
Authors:Frijters, Paul
Haisken-DeNew, John P.
Shields, Michael A.
Issue Date:2002
Series/Report no.:IZA Discussion paper series 419
Abstract:We quantify the value of changes in life circumstances in Germany following reunification. To this end, we develop and implement a fixed-effect estimator for ordinal life satisfaction in the German Socio-Economic Panel. We find strong negative effects on life satisfaction from being recently fired, losing a spouse through either death or separation and time spent in hospital, whilst we find strong positive effects from income and marriage. Using a new causal decomposition technique, we find that East Germans experienced a continued improvement in life satisfaction after 1990 to which increased household incomes contributed around 12%. Most of the increase is explained by improved average circumstances, such as public services. For West Germans, we find virtually no change in satisfaction between 1991 and 1999.
Subjects:Life satisfaction
German reunification
random and fixed-effects
panel models
causal decomposition
JEL:C23
Z1
I31
C25
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
Publikationen von Forscherinnen und Forschern des DIW

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