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Is Inequality in Subjective Well-Being Meritocratic? Danish Evidence from Linked Survey and Administrative Data

Author

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  • Claus Thustrup Kreiner

    (University of Copenhagen, CEBI, CESifo, and CEPR)

  • Isabel Skak Olufsen

    (University of Copenhagen and CEBI)

Abstract

This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background (SEB) and meritocratic inequality due to differences in individual merits such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in wellbeing already in early adulthood, where differences in economic outcomes are not yet visible. At age 18-19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65-85 percent in midlife (age 40-55), where it is also higher than the role of merits in income inequality. The positive conclusions that inequality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity approach.

Suggested Citation

  • Claus Thustrup Kreiner & Isabel Skak Olufsen, 2022. "Is Inequality in Subjective Well-Being Meritocratic? Danish Evidence from Linked Survey and Administrative Data," CEBI working paper series 22-10, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    • Handle: RePEc:kud:kucebi:2210
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    File URL: https://www.econ.ku.dk/cebi/publikationer/working-papers/CEBI_WP_10-22.pdf
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    References listed on IDEAS

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    1. Kristoffer Berg & Morten Håvarstein & Magnus E. Stubhaug, 2024. "Meritocratic Labor Income Taxation," CESifo Working Paper Series 11058, CESifo.

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    More about this item

    Keywords

    Subjective well-being; inequality; intergenerational mobility;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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