Abstract
There is a common belief that economic crisis will lead to a decrease in subjective wellbeing. Previous studies indicate that
income is correlated with happiness and unemployment with unhappiness. The relationship between increased income and happiness
is well documented while the impact of decreased income has been less explored. The aim of this paper is to study how the
economic downfall in Iceland, followed by reduced income and increased unemployment, affects happiness as well as to explore
which groups are most vulnerable to changes in happiness and which are most resilient. The study is a longitudinal, nationally
representative postal survey which assessed 5,918 individual’s aged 18–79. A total of 4,092 (77.3%) answered again in 2009.
The relationship between economic factors and happiness was explored using multiple linear regression to find out how much
they explain of the happiness variance and the changes in happiness, together with demographic factors, health and social
relationships. Results indicate that income and unemployment did not predict happiness but financial difficulties did. A decrease
in happiness was detected after the collapse. The change in happiness from 2007 to 2009 was normally distributed, 40% had
the same score in both years and an equal number increased as decreased. The explored factors did not explain the changes
in happiness. The economic crisis had a limited affect on happiness. Those with financial difficulties were hardest hit. Changes
in happiness need to be studied further since they are not well explained by the factors which influence cross-sectional levels
of happiness.
income is correlated with happiness and unemployment with unhappiness. The relationship between increased income and happiness
is well documented while the impact of decreased income has been less explored. The aim of this paper is to study how the
economic downfall in Iceland, followed by reduced income and increased unemployment, affects happiness as well as to explore
which groups are most vulnerable to changes in happiness and which are most resilient. The study is a longitudinal, nationally
representative postal survey which assessed 5,918 individual’s aged 18–79. A total of 4,092 (77.3%) answered again in 2009.
The relationship between economic factors and happiness was explored using multiple linear regression to find out how much
they explain of the happiness variance and the changes in happiness, together with demographic factors, health and social
relationships. Results indicate that income and unemployment did not predict happiness but financial difficulties did. A decrease
in happiness was detected after the collapse. The change in happiness from 2007 to 2009 was normally distributed, 40% had
the same score in both years and an equal number increased as decreased. The explored factors did not explain the changes
in happiness. The economic crisis had a limited affect on happiness. Those with financial difficulties were hardest hit. Changes
in happiness need to be studied further since they are not well explained by the factors which influence cross-sectional levels
of happiness.
- Content Type Journal Article
- Pages 1-19
- DOI 10.1007/s11205-011-9973-8
- Authors
- Dora Gudrun Gudmundsdottir, The Directorate of Health in Iceland, Reykjavík, Iceland
- Journal Social Indicators Research
- Online ISSN 1573-0921
- Print ISSN 0303-8300