Does Joining the EU Make You Happy? Evidence from Bulgaria and Romania

Abstract

We examine the effect of joining the European Union on individual life satisfaction in Bulgaria and Romania in the context of the 2007 EU enlargement. Although EU membership is among the most important events in Bulgaria and Romania’s modern histories, there is no evidence on how it affected the subjective well-being of ordinary people in the two countries. Using a difference-in-differences strategy and Eurobarometer data, we provide some of the first evidence that joining the EU increased average life satisfaction in Bulgaria and had a positive but statistically insignificant effect in Romania. One explanation is that after both countries joined in 2007, trust towards the EU only increased in Bulgaria but not in Romania. Furthermore, Romania’s political war of 2007 may have mired the country’s positive life satisfaction experiences related to EU membership. We also show that the younger, the employed and those with a high-school education were the winners from EU integration. Our results are robust to two placebo tests, in which we use two fake entry dates to the EU, as well as an estimation using bootstrapped standard errors. Our findings have implications for EU integration policy and future enlargements.

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Fig. 1

Source: Authors

Fig. 2

Source: Authors’ estimation using World Development Indicators for GDP per capita, unemployment and inflation; Authors’ estimation using Worldwide Governance Indicators for the Rule of Law Variable

Fig. 3

Source: Authors’ estimation using Eurobarometer data

Notes

  1. 1.

    The EU-8 countries are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia and Slovakia. The EU-2 countries are Bulgaria and Romania, which joined in 2007. Croatia joined the EU in July 2013 but is excluded from this analysis due to limited post-membership data. As explained in Sect. 3, it is used instead as the counterfactual.

  2. 2.

    The EU-15 countries are: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom.

  3. 3.

    Authors’ calculations based on data from the World Development Indicators and Gallup Analytics.

  4. 4.

    Along with Slovakia and Hungary, Bălţătescu (2007) considers Bulgaria and Romania among the least likely members to catch up with the EU-15 in terms of life satisfaction.

  5. 5.

    In this paper, we use the terms subjective well-being (SWB) and life satisfaction synonymously. Happiness and life satisfaction are, however, two distinct dimensions of SWB with different determinants (Graham and Nikolova 2015; Stone and Mackie 2014).

  6. 6.

    To the best of our knowledge, the Eurobarometer surveys are the only publicly available data allowing the reliable comparison of subjective well-being before and after the 2007 enlargement.

  7. 7.

    As explained below, to correct for Moulton bias, we use wild bootstrapped standard errors following Cameron et al. (2008).

  8. 8.

    Other papers examine convergence in living standards between old and new EU members (Cornelisse and Goudswaard 2002; Giannias et al. 1999; Neumayer, 2003).

  9. 9.

    Some EU15 countries such as Germany, France and the UK had provisional restrictions on immigration from the new member states for up to 7 years, which expired in 2014. However, Bulgarians were able to work in 10 out of the 27 EU members including Sweden, Finland and the Czech Republic, which significantly expanded their opportunity set.

  10. 10.

    Survey of May 16–21, 2006, conducted by ALPHA Research Agency, “Public Opinion for the Bulgarian membership to the EU, and the readiness of the country for a membership,” published on 31.05.2006, available at: http://www.aresearch.org.

  11. 11.

    Other papers such as Delhey (2001) and Bălţătescu (2007) study the life satisfaction convergence between old and new EU members using different EU enlargement waves. Delhey (2004) is an early attempt to describe how previous accession countries fared in terms of life satisfaction. This publication also compared pre-accession life evaluations of countries that joined the EU in the 1980 s with the pre-accession life evaluations of the 2004/2007 enlargement countries.

  12. 12.

    The EB survey does not cover the transition countries in Central Asia and Albania, while polls for Serbia, Montenegro and Macedonia are available only post-2007. EB first surveyed Croatia in 2004.

  13. 13.

    See Fig. 2.2 in the World Happiness Report (Helliwell et al. 2015).

  14. 14.

    In a similar setup studying the SWB effects of the Euro currency adoption, Popova (2012) uses 3 years of data, while Wunder et al. (2008) uses two years before and after the euro adoption.

  15. 15.

    The following EB surveys are included in the main analysis and the robustness checks: 63.1, 63.4, 64.2, 65.2, 66.1, 67.2, 68.1, 69.2, 70.1, 71.1, 71.2, 71.3. In the main analyses (2006–2008), we include only 65.2, 66.1, 67.2, 68.1, 69.2, 70.1. While there are two other EB surveys in 2009–72.1 and 72.4–we did not include them as EB 72.1 does not poll Croatia and 72.4 did not have the exact date of the interview.

  16. 16.

    The treatment variable (EU-2 × 2007Q2) is the interaction term between the EU-2 variable (i.e. a dummy for either Bulgaria or Romania) with a dummy for the post-membership period (2007Q2 and after).

  17. 17.

    We include age and its squared term, gender, an indicator for whether the respondent is married or in a civil partnership, a married × gender interaction, employment status, household size and its squared term, an indicator for whether there are any children in the household, an indicator for a large or small town and age-education categories.

  18. 18.

    In all models, the EU dummy is negative and statistically significant, reiterating that individuals in Bulgaria and Romania have lower baseline life satisfaction than their Croatian counterparts. In particular, depending on the model, life satisfaction in Bulgaria is between 0.58 and 0.75 points lower compared to Croatia, while the (conditional) life satisfaction difference between Romanians and Croatians is between 0.32 and 0.47 points lower in the former (on a scale of 1–4).

  19. 19.

    As in Table 2, the coefficient for the EU-2 indicator in Table 3 shows that life satisfaction in both Romania and Bulgaria was about 0.47 and 0.79 points lower than in Croatia, respectively.

  20. 20.

    In Bulgaria, we find a positive but marginally statistically significant change in life satisfaction in the last quarter of 2006, just prior to membership.

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Acknowledgments

The authors would like to thank Carol Graham, Martijn Hendriks, Monica Roman, Madiha Afzal, Peter Murrell, Cliff Gaddy, and Dave Crocker, as well as IZA Reading Group participants for helpful comments and suggestions. The authors also acknowledge literature review help from Margard Ody, research assistance from Sarah Stahlmann, and copy-editing support from Richard Forsythe. A preliminary version of the paper, entitled “Does Joining the EU Make You Happy? Evidence from Central and Eastern Europe,” appeared as a chapter in Milena Nikolova’s dissertation written at the University of Maryland, College Park.

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Appendix

Appendix

See Table 10.

Table 10 Joining the EU and life satisfaction, heterogeneous treatment effects, by gender.

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Nikolova, M., Nikolaev, B. Does Joining the EU Make You Happy? Evidence from Bulgaria and Romania. J Happiness Stud 18, 1593–1623 (2017). https://doi.org/10.1007/s10902-016-9789-y

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Keywords

  • Subjective well-being
  • Happiness
  • Transition economies
  • Difference-in-differences
  • European Union
  • EU enlargement

JEL Classification

  • I31
  • I39
  • P20