The Value of Reunification in Germany: An Analysis of Changes in Life Satisfaction

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 419

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; General Welfare; Well-Being ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
• Subject: Life satisfaction ; German reunification ; random and fixed-effects ; panel models ; causal decomposition ; Lebensqualität ; Lebensstandard ; Nationale Einheit ; Öffentliche Meinung ; Schätzung ; Deutschland ; Neue Bundesländer ; Lebenszufriedenheit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frijters, Paul ; Haisken-DeNew, John P. ; Shields, Michael A.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/20027
• Last update: 10.03.2025, 11:42 AM CET