Economic freedom, income inequality and life satisfaction in OECD countries

Johan Graafland; Bjorn Lous

doi:10.1007/s10902-017-9905-7

Economic freedom, income inequality and life satisfaction in OECD countries

Johan Graafland
, Bjorn Lous

Research output: Contribution to journal › Article › Scientific › peer-review

65 Citations (Scopus)

Abstract

Since Piketty’s Capital in the 21st Century in 2014, scientific interest into the
impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a
negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction.

Original language	English
Pages (from-to)	2071-2093
Journal	Journal of Happiness Studies
Volume	19
Issue number	7
DOIs	https://doi.org/10.1007/s10902-017-9905-7
Publication status	Published - Oct 2018

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 1 No Poverty
SDG 10 Reduced Inequalities
SDG 16 Peace, Justice and Strong Institutions

Keywords

Economic freedom
income inequality
life satisfaction
mediation
regulation
tax freedom
trade freedom

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10.1007/s10902-017-9905-7

Cite this

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Economic freedom, income inequality and life satisfaction in OECD countries

Abstract

UN SDGs

Keywords

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