Income comparison, gender roles and life satisfaction

ABSTRACT

This article uses data from the German Socio-Economic Panel to analyse the effect of within household income comparison on individual life satisfaction. Our within couple and individual fixed-effects panel estimates suggest that gender roles influence subjective well-being (SWB). A primary breadwinner wife decreases a couple’s individual happiness by eight per cent. The article adds to the findings on interdependence of SWB and hints at negative consequences of traditional gender identity norms for individual happiness.

KEYWORDS:

• Life satisfaction
• well-being
• happiness
• income comparison
• gender identity

JEL CLASSIFICATION:

• D10
• I31
• J16

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ The terms well-being, happiness and life satisfaction are used interchangeably.

² The McCrary (2008) test for discontinuity estimates a distributional drop of 18.1% (t-ratio = 3.8) for households with a high school degree or less and a drop of 0.4% (t-ratio = 0.04) for households with more than high school education.

³ The absolute income rank difference relates to the gender-specific income distribution.

⁴ Annual reference income is defined as the income average of identical education, age and regional cells.

⁵ As additional robustness check, we estimate individual happiness as function of changes in the couple’s relative income ratio. Our results remain robust and are available on request.