Trends of subjective well-being (SWB) in transition countries are peculiar: they show substantial changes that are more strongly correlated with the trends of GDP than in other developed countries. This paper examines the role of the trends of GDP and of social trust in predicting the trends of well-being. We find that the strength of the relationship between social trust and SWB over the medium-term is comparable to that of GDP. We conclude that in the medium-term, even in countries where material concerns strongly affect well-being, social trust is a powerful predictor of the trends of SWB. However, in the short run the relationship between social trust and SWB does not hold and GDP stands out as the only significant correlate of SWB.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
Easterlin and Angelescu (2009) and Easterlin et al. (2010) criticized these results arguing that they fail to distinguish between the long and the short run. In particular, Easterlin and colleagues showed that the positive and significant relation estimated by Stevenson and Wolfers (2008) and Sacks et al. (2010) is generated by the inclusion in the sample of countries with short time-series. Easterlin et al. (2010) documented that GDP matters for SWB in the short run, but that this correlation vanishes in the long-term. The tendency of SWB and GDP to vary together during contractions and expansions has been documented also by Di Tella et al. (2001) and Bartolini and Sarracino (2014).
Opinions about social capital under communism differ. The “dictatorship theory of social capital” states that dictatorship destroys trust and cooperation among citizens (Fidrmuc and Gërxhani 2008; Paldam and Svendsen 2001). On the other hand, Paldam and Svendsen (2001) claims that an inefficient planned economy forced creation of “negative social capital”, i.e. informal networks (gray zones, corruption) that “fixed” the economic system and allowed its functioning despite inefficiencies.
In the WVS/EVS the distances between two consecutive waves are not regular, ranging from 1 to 8 years. It is therefore impossible to attribute the variations between contiguous surveys to the long, medium and short-term. Having data that are regularly surveyed in time is fundamental to define which time horizon is measured by such intervals.
World Development Indicators and Global Development Finance, http://databank.worldbank.org/ddp/home.do?Step=12&id=4&CNO=2.
This result is also confirmed for models with non standardized variables, see “Appendix 3”.
Dfbetas measure how much a given coefficient changes after excluding a specific country from the sample (Coxe et al. 2013, p. 49). In the medium run the influential countries are: Hungary, Slovakia and Ukraine (model for happiness) and Estonia and Poland (model for life satisfaction). In the short run the influential countries are: Estonia, Hungary and Ukraine (model for happiness) and Hungary and Bulgaria (model for life satisfaction).
Abbott, P., & Sapsford, R. (2006). Life-satisfaction in post-soviet Russia and Ukraine. Journal of Happiness Studies, 7, 251–287.
Abbott, P., Wallace, C., & Sapsford, R. (2011). Surviving the transformation: Social quality in Central Asia and the Caucuses. Journal of Happiness Studies, 12(2), 199–223.
Allison, P. (2001). Missing data. SAGE University Paper (Vol. 136).
Andrèn, D., & Martinsson, P. (2006). What contributes to life satisfaction in transitional Romania? Review of Development Economics, 10(1), 59–70.
Arts, W., Hermkens, P., & Van Wijck, P. (1995). Anomie, distributive injustice and dissatisfaction with material well-being in Eastern Europe. International Journal of Comparative Sociology, 36(1–2), 1–16.
Bartolini, S. (2010). Manifesto per la felicità: Come passare dalla società del ben-avere a quella del ben-essere. Roma: Donzelli editore.
Bartolini, S., Bilancini, E., & Pugno, M. (2013a). Did the decline in social connections depress Americans’ happiness? Social Indicators Research, 110(3), 1033–1059.
Bartolini, S., Bilancini, E., & Sarracino, F. (2013b). Predicting the trend of well-being in Germany: How much do comparisons, adaptation and sociability matter? Social Indicators Research, 3(114), 169–191.
Bartolini, S., & Bonatti, L. (2008). Endogenous growth, decline in social capital and expansion of market activities. Journal of Economic Behavior and Organization, 67(3), 917–926.
Bartolini, S., & Sarracino, F. (2014). Happy for how long? How social capital and economic growth relate to happiness over time. Ecological Economics, 108, 242–256.
Bartolini, S., & Sarracino, F. (2015). The dark side of chinese growth: declining social capital and well-being in times of economic boom. World Development, 74, 333–351.
Becchetti, L., Pelloni, A., & Rossetti, F. (2008). Relational goods, sociability and happiness. Kyklos, 61(3), 343–363.
Berggren, N., & Jordahl, H. (2005). Free to trust? Economic freedom and social capital. Working Paper Series 2005:2, Uppsala University, Department of Economics.
Bjørnskov, C. (2006). The multiple facets of social capital. European Journal of Political Economy, 22(1), 22–40.
Blanchflower, D. (2008). International evidence on well-being. IZA Discussion Papers (Vol. 3354).
Brockmann, H., Delhey, J., Welzel, C., & Yuan, H. (2009). The China puzzle: Falling happiness in a rising economy. Journal of Happiness Studies, 10, 387–405.
Bruni, L., & Stanca, L. (2008). Watching alone: Relational goods, television and happiness. Journal of Economic Behavior and Organization, 65(3–4), 506–528.
Coxe, S., West, S. G., & Aiken, L. S. (2013). Generalized linear models, chapter 3. In T. D. Little (Ed.), The Oxford handbook of quantitative methods: Statistical Analysis (Vol. 2, pp. 26–51). Oxford: Oxford University Press.
Deaton, A. (2008). Income, health, and well-being around the world: Evidence from the Gallup World Poll. The Journal of Economic Perspectives, 22(2), 53–72.
Delhey, J. (2010). From materialist to post-materialist happiness? National affluence and determinants of life satisfaction in cross-national perspective. Social Indicators Research, 97(1), 65–84.
Di Tella, R., MacCulloch, R., & Oswald, A. (2001). Preferences over inflation and unemployment: Evidence from surveys of happiness. American Economic Review, 91, 335–341.
Easterlin, R. (2009). Lost in transition: Life satisfaction on the road to capitalism. Journal of Economic Behavior & Organization, 71(2), 130–145.
Easterlin, R., & Angelescu, L. (2009). Happiness and growth the world over: Time series evidence on the happiness-income paradox (Vol. 4060). IZA Discussion Paper.
Easterlin, R. A., Angelescu, L., Switek, M., Sawangfa, O., & Zweig, J. S. (2010). The happiness-income paradox revisited. Proceedings of the National Academy of Sciences, 107(52), 1–6.
ESS. (2008). European social survey round 1 to 4 data. Technical report, Norwegian Social Science Data Services, Norway—Data Archive and distributor of ESS data.
Ferrer-i Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? The Economic Journal, 114(497), 641–659.
Fidrmuc, J., & Gërxhani, K. (2008). Mind the gap! Social capital, East and West. Journal of Comparative Economics, 36(2), 264–286.
Frijters, P., Geishecker, I., Haisken-DeNew, J. P., & Shields, M. A. (2006). Can the large swings in Russian life satisfaction be explained by ups and downs in real incomes? Scandinavian Journal of Economics, 108(3), 433–458.
Frijters, P., Haisken-DeNew, J. P., & Shields, M. A. (2004). Investigating the patterns and determinants of life satisfaction in Germany following reunification. The Journal of Human Resources, 39(3), 649–674.
Grün, C., & Klasen, S. (2001). Growth, income distribution and well-being in transition countries. The Economics of Transition, 9(2), 359–394.
Guriev, S., & Zhuravskaya, E. (2009). (Un)happiness in transition. Journal of Economic Perspectives, 23(2), 143–168.
Helliwell, J. (2001). Social capital, the economy and wellbeing. In The review of economic performance: The longest Decade: Canada in the 1990s. Ottawa: Centre for the Study of Living Standards.
Helliwell, J. (2006). Well-being, social capital and public policy: What’s new? The Economic Journal, 116(510), 34–45.
Helliwell, J. (2011). Institutions as enablers of wellbeing: The Singapore prison case study. International journal of well-being, 1(2), 255–265. doi:10.5502/ijw.v1i2.7.
Helliwell, J. F. (2003). How’s life? Combining individual and national variables to explain subjective well-being. Economic Modelling, 20(2), 331–360. Henry Special Issue.
Helliwell, J. F., & Putnam, R. D. (2004). The social context of well-being. Philosophical Transactions: Royal Society of London Series Biological Sciences, 359(1449), 1435–1446.
Hirsch, F. (1976). Social limits to growth. Cambridge, MA: Harvard University Press.
Inglehart, R., Foa, R., Peterson, C., & Welzel, C. (2008). Development, freedom, and rising happiness: A global perspective (1981–2007). Perspectives on Psychological Science, 3(4), 264–285.
Kaasa, A., & Parts, E. (2008). Individual-level determinants of social capital in Europe. Acta Sociologica, 51(2), 145–168.
Knack, S. (2001). Trust, associational life and economic performance. In J. Helliwell & A. Bonikowska (Eds.), The contribution of human and social capital to sustained economic growth and well-being (pp. 172–202). Ottawa and Paris: Human Resources Development Canada and OECD.
Knack, S., & Keefer, P. (1997). Does social capital have an economic payoff? A cross-country investigation. The Quarterly Journal of Economics, 112(4), 1251–1288.
Lelkes, O. (2006). Tasting freedom: Happiness, religion and economic transition. Journal of Economic Behavior & Organization, 59(2), 173–194.
Mikucka, M., & Sarracino, F. (2014). Trends of social capital in 30 European countries, 1990–2008, chapter 12. In F. Sarracino & M. Mikucka (Eds.), Beyond money: The social roots of health and well-being. New York: Nova Science Publishers.
OECD. (2001). The evidence on social capital. In The well-being of nations: The role of human and social capital (pp. 39–63). Paris: OECD.
Paldam, M., & Svendsen, G. T. (2001). Missing social capital and the transition in Eastern Europe. Journal for Institutional Innovation, Development and Transition, 5, 21–33.
Polanyi, K. (1968). The great transformation. Boston: Beacon.
Putnam, R. (2000). Bowling alone: The collapse and revival of American community. New York, NY: Simon and Schuster.
Putnam, R., Leonardi, L., & Nanetti, R. (1993). Making democracy work: Civic traditions in modern Italy. Princeton, NJ: Princeton University Press.
Raiser, M., Rousso, A., & Steves, F. (2003). Trust in transition: Cross-country and firm evidence. Working Papers 82, European Bank for Reconstruction and Development, Office of the Chief Economist.
Rogers, S., Halstead, J., Gardner, K., & Carlson, C. (2010). Examining walkability and social capital as indicators of quality of life at the municipal and neighborhood scales. Applied Research of Quality of Life. doi:10.1007/s11482-010-9132-4.
Roth, F. (2009). Does too much trust hamper economic growth? Kyklos, 62(1), 103–128.
Sacks, D. W., Stevenson, B., & Wolfers, J. (2010). Subjective well-being, income, economic development and growth. NBER Working Paper Series (Vol. 16441).
Sanfey, P., & Teksoz, U. (2007). Does transition make you happy? The Economics of Transition, 15, 707–731.
Sarracino, F. (2011). Trends of social capital across Europe. Conference presentation. In Understanding value patterns in Europe—Fourth European Values Study workshop after 2008 wave. Faculty of Philosophy: Vilnius University.
Schafer, J. (1997). Analysis of incomplete multivariate data. Chapman and Hall: CRC, CRC Press Company.
Schafer, J. (1999). Norm: Multiple imputation of incomplete multivariate data under a normal model. Technical report. version 2.
Sissenich, B. (2010). Weak states, weak societies: Europe’s east-west gap. Acta Politica, 45(1–2), 11–40.
Stevenson, B., & Wolfers, J. (2008). Economic growth and subjective well-being: Reassessing the Easterlin paradox. IZA DP (Vol. 3654).
Sztompka, P. (1993). Civilizational incompetence: The trap of post-communist societies. Zeitschrift für Soziologie, 22(2), 85–95.
Sztompka, P. (1996). Trust and emerging democracy lessons from Poland. International Sociology, 11(1), 37–62.
Sztompka, P. (1998). Trust, distrust and two paradoxes of democracy. European Journal of Social Theory, 1(1), 19–32.
Sztompka, P. (1999). Trust: A sociological theory. Cambridge, MA: Cambridge University Press.
Veenhoven, R. (2001). Are the Russians as unhappy as they say they are? Journal of Happiness Studies, 2(2), 111–136.
Veenhoven, R., & Vergunst, F. (2013). The Easterlin illusion: Economic growth does go with greater happiness. EHERO working paper 2013/1.
Zagórski, K. (2011). Income and happiness in time of post-communist modernization. Social Indicators Research, 104, 331–349. doi:10.1007/s11205-010-9749-6.
Zak, P., & Knack, S. (2001). Trust and growth. The Economic Journal, 111, 295–321.
Zhao, R., & Cao, L. (2010). Social change and anomie: A cross-national study. Social Forces, 88(3), 1209–1229.
Appendix 1: Data Missingness in the ESS Data-Set
The sixth column of Table 5 informs that the percentage of missing data is on average <1 %. Only in the case of the index of social trust the percentage of missingness raises to 1.4 %. However, such a small percentage does not raise any particular worry for the reliability of our estimates (Allison 2001). Data missingness is further analysed across waves in Table 6. Figures inform that also in this case percentages of missingness are negligible and, according to the literature on data missingness, they are not likely to affect estimates (Schafer 1997, 1999; Allison 2001).
Appendix 2: Factor Analysis for Trust Questions in the ESS
Table 7 informs that in the pooled sample, factor loadings range from 0.80 to 0.85 thus suggesting that the three variables contribute equally to the definition of a latent concept that we call “social trust”. When observing results across waves (see Table 8), we notice that discrepancies arise mainly in the first and third wave where factor loadings range from about 0.79 for the helpfulness variable to 0.84 for the fairness variable. The slight variability among factor loadings both in the pooled sample and within waves convinced us of the opportunity to build an aggregated index of social trust resulting from the standardized weighted average of the three items.
Appendix 3: Non-standardized Trivariate Regressions
Appendix 4: Long-Term Relationships, Controlling for Outliers
See Table 11.
Appendix 5: Short-Term Relationships, Controlling for Outliers
See Table 12.
Appendix 6: Country Acronyms in the ESS
Rights and permissions
About this article
Cite this article
Bartolini, S., Mikucka, M. & Sarracino, F. Money, Trust and Happiness in Transition Countries: Evidence from Time Series. Soc Indic Res 130, 87–106 (2017). https://doi.org/10.1007/s11205-015-1130-3
- Easterlin paradox
- Economic growth
- Subjective well-being
- Life satisfaction
- Social capital