Assessing Happiness Inequality in the Welfare State: Self-Reported Happiness and the Rawlsian Difference Principle

The effect of the size of the welfare state on the average happiness level in a nation has often been discussed—but the same effect on happiness inequality has been explored much less. Rooted in divergent philosophical disciplines, utilitarianism and egalitarianism respectively, scholars have discussed the merits of policies as they effect each of these two criteria for justice. John Rawls’ difference principle, on the other hand, philosophically justifies a limited trade-off, increasing happiness inequality to benefit the over-all happiness level of the least advantaged. The difference principle—that society should allow inequality insofar as it is to the greatest benefit of the least advantaged—has seldom been discussed empirically in the context of the happiness literature. This paper contributes to the ongoing literature evaluating the welfare state in light of happiness indicators by introducing the difference principle and asking whether the welfare state benefits the least advantaged in society. My empirical analysis shows that self-reported life satisfaction of the least advantaged does not improve from an increase in the size of the welfare state more than the self-reported life satisfaction of the average citizen. In short, the welfare state does not benefit the worst-off in a society in terms of happiness more than the average member. Copyright Springer Science+Business Media Dordrecht 2013