14
do not record this variable to be significant for Russia, while Ravallion and Lokshin (2000)
report the opposite result.
With regard to education we find for both Eastern Europe and Western countries that more
educated persons tend to be more satisfied.5 However, in the present sample of East European
countries, this result is only robust for people with a university degree when applying the
statistical reduction process. In addition, Namazie and Sanfey (1999) do not find significant
results of education for happiness in Kyrgyzstan. In the present study, the marginal
probability effects of holding a university degree are slightly lower, in absolute values, than
the ones estimated for being married.
Differences in the income position, on the other hand, affect happiness through all quartiles.
This is a consistent finding across all studies contained in Table 3. Note that the income
variable used here, and in most other comparative studies, measures a mixture between an
absolute and a relative income effect. The absolute income effect derives from the fact that
the people who are in the upper income quartiles are by construction the high income people
and vice versa. However, there is also a relative effect, as we sort people according to their
relative income position within their society. By pooling across countries, we include people
in the same income quartile whose absolute income may be quite different. Unfortunately,
data limitations do not allow us to properly distinguish between absolute and relative income
effects in the present sample. The marginal effects of being in the highest income quartile are
the largest in the model, except for the ones of the country dummies as noted earlier. A person
entering the highest income category, from being in the lowest, achieves an increase in the
probability of answering “very satisfied” by 20%. Interestingly, for the second highest income
category, this increase is 10% and for the second-lowest category 5%, which suggests a
pattern of doubling this probability with every consecutive jump in the income categories.
Finally, the unemployed are less happy than people in all other employment categories, even
after controlling for a number of other influences, including income position. Moreover, the
impact of unemployment on happiness, at least compared to the other variables in the
regression, is not trivial. For instance, the decrease in probability of being “very satisfied” as a
result of being out of work is greater than that of a fall from the upper-middle income
category to the lowest one. Generally, becoming unemployed will imply a loss of happiness
due to lower income as well as due to being in the state of unemployment involving a loss of
social standing, self-respect, and gloomy future perspectives.