Socio-Economic Inequalities in Happiness in China and U.S.

Our paper studies the determinants of happiness in China and U.S. and provides a better understanding of the issue of inequalities in happiness beyond income inequality. Based on the two waves of nation-wide survey data on happiness collected by World Values Survey in 1995 and 2007, Probit and ordinary least square methods are used to estimate effects of various factors on happiness. Our findings show that socio-economic inequalities increase inequalities in happiness in China. The poor are the least happy even though the income effect flats out at the high end. Individuals with below high school education attainment are less happy than those with more education. Agricultural workers are the most unhappy and are becoming even more unhappy over time. However, in U.S., there is no systematic difference in happiness across income and education groups and between agricultural and non-agricultural workers. In both countries health is a major factor contributing to happiness. Our study implies that adequate provision of national health care services should be an effective way to improve social welfare. Besides, since the probability of being happy for agricultural workers is still considerably less after controlling for income in China, policies to improve their welfare should not be limited to enhancing current income.