The Mechanism Of The Impact Of Individual Income On Subjective Well-Being:Theory And Evidence

Happiness is not only the ultimate goal pursued by people,but also the key issue of national concern.Income has been seen as an indicator of the degree of subjective well-being.In the past 40 years of reform and opening up,China's economy develops and people's income level has improved.However,people's subjective well-being has not kept pace with the level of economic development,and even has a tendency to deviate from the direction of economic development.Scholars study the relationship between income and subjective well-being.They proposed absolute income theory,relative income theory,adaptive theory and expected income theory,but previous studies have been limited to one aspect.Few scholars consider the influence of relative income and adaptive income on happiness.Therefore,this paper based on the theory,analyzes the impact of income on subjective well-being.This thesis uses the China Labor Dynamic Survey to analyze the impact of income on subjective well-being using STATA14.0.This paper includes four parts: literature review,theoretical basis,empirical analysis,conclusions and policy recommendations.Firstly we review the theoretical and empirical results of the subjective well-being of income impact.Secondly we construct the theoretical model of dynamic income and expected income to Subjective Well-being.Thirdly we analyze the subjective well-being of dynamic income and expected income using the CLDS.We select the area of residence,age,gender,marital status,education,the political appearance and other aspects as a reference group to verify the impact of dynamic income on Subjective Well-being.Finally we propose recommendations according to the results of empirical research.The empirical results show that the absolute income and the subjective well-being of the individual labor force are inverse U-shaped.Income increments are positively correlated with subjective well-being.Relative income has a significant effect on the subjective well-being of individual laborers.The greater the difference between the average income of individual income and the reference group,the higher the subjective well-being of the individual,and the promotion of relative income is higher than the effect of absolute income.When different reference groups are used,the relative income level with reference to marital status has the least impact on subjective well-being,and the relative income level with reference to political appearance has the greatest impact on subjective well-being.When compared with the individuals who were worse off in two periods,dynamic income has a significant positive impact on subjective well-being.The contribution of dynamic income to subjective well-being in three cases is from small to large: individuals with relatively good economic conditions,individuals with relatively poor economic conditions,individuals whose economic status were always better.When different reference groups are selected,the empirical findings are consistent with the empirical results of the overall sample.Compared with the existing research,the innovations of this paper are as follows:(1)In the construction of the theoretical model,this paper expands the utility function theory,considering the interaction between the historical income of the time dimension and the relative income of the spatial dimension.The impact of dynamic income on subjective well-being,and the inclusion of expected income into the factors affecting subjective well-being,make up for the gap in China's research on the impact of income dynamics and expected income on subjective well-being;(2)data used in empirical analysis In this paper,the paper uses the 2014 China Labor Dynamics Survey data,and introduces the income of individual laborers in 2012 and 2014,and studies the impact of dynamic changes in income on subjective well-being;(3)on the selection of empirical models,based on subjective The order of happiness is special.This paper uses the ordered logistic regression model to empirically analyze the subjective well-being of income.