Closing the “happiness gap” by closing the wealth gap: the role of wealth on life satisfaction between east and west-Germans

Abstract

Background In Germany there is a large wealth gap between East and West Germans as well as a gap in life satisfaction, with people in East Germany reporting to be less satisfied. This paper intends to shed light on the role of the different levels of wealth and their association with life satisfaction. On a wider scale, this paper examines psychological consequences of wealth inequality between large societal groups. Method Longitudinal data from the years 2007, 2012, and 2017 of the German Socio-Economic Panel (GSOEP) with a sample size of N = 5066 (Nfemale = 2522, Nwest = 3756, mage2007 = 50.46) was used. To test our hypothesis, multiple linear regression models as well as a fixed-effects regression model were run. Furthermore, to examine the development of wealth distribution between different birth cohorts in East and West Germany a latent growth curve model was calculated. Results Net-worth was found to be a highly significant predictor for life satisfaction. This holds true for variance between respondents as well as for individual change over time within respondents. Additionally, the results show that the wealth gap between East and West Germans in total as well as within most of the birth cohorts increased. Conclusion Due to their socialistic history and the related obstacles in acquiring wealth as well as the unbalanced distribution of GDR-assets after the reunification, East Germans are significantly less wealthy than West Germans. This has consequences on the mental well-being and the life satisfaction of East Germans.

Will wealth inequality decrease happiness?—Empirical evidence from China

“…While the ordered probit model is commonly used in happiness studies, Ferrer-i-Carbonell and Frijters (2004) have noted that OLS regression can yield results comparable to those of the ordered probit model in this context. This approach is also consistent with earlier research in this field, such as the works of Gao et al (2022) and Kasinger et al (2023) , who used linear regression models in their analyses.…”

“…This perspective suggests that wealth may be an overlooked factor in prior income–happiness studies, as low income does not necessarily equate to low wealth, and wealth impacts happiness in more ways than income alone. Supporting this view, Kasinger et al (2023) found that net wealth is a significant predictor of life satisfaction, based on data from the German Socio-Economic Panel (GSOEP). Nonetheless, research in the area of wealth and happiness remains relatively limited.…”

“…The second noteworthy study is by Kasinger et al (2023) , which determined that net wealth is a highly significant predictor of life satisfaction, based on analysis of the German Socio-Economic Panel (GSOEP) data. This research centers on the impact of absolute wealth on life satisfaction, including an examination of the divergent wealth trajectories in West and East Germany.…”

Mental health and life satisfaction in East and West Germany: Effects of generation and migration of citizens

“…A lower level of income ( Table 1 ), high rates of unemployment, respectively premature pension decrease satisfaction with income and with work. Recently, we could show that wealth is predictive of life satisfaction ( 20 ). The still-increasing wealth gap clearly acts in favor of the wealthier inhabitants of the Western states.…”

Unterschiede in der Zufriedenheit verschiedener Lebensbereiche zwischen Ost- und Westdeutschen in den Jahren 1991, 2006 und 2020

“…Auch wenn sich die Löhne und das Haushaltseinkommen in Ostdeutschland verbessert und dem Westen angenähert haben, gibt es dennoch signifikante Unterschiede, wobei die Ostdeutschen nach wie vor weniger verdienen [16]. Ein weiterer Aspekt, der sicherlich zur finanziellen Unzufriedenheitslücke beiträgt, sind die sehr ungleich verteilten Vermögenswerte zwischen Ost-und West-deutschland, die ebenfalls einen Einfluss auf die Lebenszufriedenheitsunterschiede haben [23]. Nichtsdestotrotz sind wohl besonders die verbesserten ökonomischen Lebensbedingungen für die stetige Verbesserung der allgemeinen und bereichsspezifischen Lebenszufriedenheit verantwortlich.…”