Research On Action Mechanism Of "Happiness-income Puzzle" In China

After the emergence of Smith’s theory, the mainstream economic theories take wealthor income as the premise for people getting happiness, the level of income is regarded asan indirect measure of welfare as a major indicator of the level, making all economicpolicies to improve social welfare, and finally will due to long-term economic growth.However, the happiness survey evidence shows that economic growth can hardly improvethe welfare of the residents when the economy develops to a certain extent, and the levelof happiness tends to a stable value, economists call it the “happiness–income puzzle”,“happiness paradox” or “Easterlin paradox”. In the case of China, the World ValuesSurvey data show the same phenomenon also exists in China. So, what causes the puzzlewas happened in China? What is its mechanism? This article will conduct empiricalresearch about this issue.In this dissertation, we used four chapters to test the mechanism of China’s“happiness-income puzzle”. Firstly, estimate the relationship and mechanism betweenincome inequality and residents’ subjective well-being in China. Our results show thatincome inequality has negative effects on residents’ subjective well-being significantly.Due to the historical tradition of “Not afraid get less, but afraid unequal distribution” andthe “socialism ideology”, which makes Chinese people showed a significant aversion toincome inequality. Moreover, in addition to the significant negative impact of incomeinequality on Chinese people’s happiness, the income gap is too large, especiallyunreasonable, unfair income disparities directly affect the peace of mind of members inthe community, leading to psychological imbalance and a strong sense of loss, thebreeding of social discontent, the formation of social instability and crime factors, thesecriminal activities will further the negative impact of income inequality on residents’happiness.Secondly, estimate the relationship between social immobility, inequality of andresidents’ subjective well-being in China. Results show that the negative happiness effectsof downward mobility (-0.070points) is much greater than the positive effects of theupward mobility (0.045points), which in some extent to explain China’s current“happiness-income puzzle”. Because of social class curing more serious, growing channel for upward mobility blocked, the rest of the social class status neither not mobilenor downward mobile, which leads to overall population decline in average happiness. Atthe same time, in the process of social mobility is associated with inequality ofopportunity generally. Because society does not mobile, it will mean a lot of people can’tbe successfully underlying upward mobility, which is the loss of opportunity, thisdissertation found that inequality of opportunity between different social class is the mainreason leading to unhappy.Thirdly, estimate the relationship government quality and residents’ subjectivewell-being in China. Results show that corruption has negative effects on residents’subjective well-being significantly, because corruption is a bad “climate”, it may destructthe equity and justice of society and stimulate residents’ inner discontent. In addition, theeffects of corruption on happiness also through change the informal system (interpersonaltrust level) to achieve. Corruption will lead to residents don’t trust government agenciesand government’s staff. The loss of interpersonal trust means that the protection ofinformal system was ruptured. Residents continue to lower the sense of security, makingthem difficult to feel happy.Finally, test the Chinese-style decentralization impact on the residents’ happiness.Chinese-style decentralization resulted in distortion of the structure of fiscal expenditure,local government pay more attention to investment spending than public services andhuman capital investment expenditures, which almost has become the consensus ofscholars. However, so far, scholars are not peculiar to the depth of this discussion, thatChinese-style decentralization tend to distort the structure of expenditures, and howresidents’ social psychology, life satisfaction and subjective well-being were effect by thissituation? Results show that fiscal decentralization has negative effects on residents’subjective well-being significantly, and primarily due to the distortion of the structure ofpublic expenditure caused. Therefore, increase the proportion of social expenditure is away to solve the “happiness-income puzzle” in China.