The literature on the geography of subjective well-being, defined as the extent to which individuals are satisfied with their own life, pointed out the occurrence, at least in developed countries, of an urban/rural divide: people living in the most urbanized regions tend to be significantly less satisfied than people living in rural areas (Okulicz-Kozaryn, 2011). This stylised fact is frequently indicated in the literature as the urban well-being paradox: in spite of improved and more diversified job opportunities, accessibility to a wider range of specialised services and greater consumption amenities, people in (large) cities generally report lower levels of subjective well-being (Morrison, 2022).
The study of the relationship between individuals’ subjective well-being and the typology of their setting of residence, however, overlooked an important conceptual aspect. In fact, cities are the most diverse type of settlement and the diversity of cities has been long considered a key factor behind its enhanced opportunities for individual and aggregate development (Florida et al., 2013; Glaeser, 2011). Diversity in cities concerns not simply economic activities but also individuals; importantly, diversity manifests itself according to multiple dimensions including skills, education, occupation and income. In short, cities are made of individuals who are not alike, and may differently appreciate and be able to enjoy the advantages from urbanisation (e.g. amenities, diversified job markets, accessibility to advanced services) as well as to suffer from its disadvantages (e.g. congestion, pollution, and especially high rent). Recent literature is increasingly highlighting the role of compositional effects and people-related aspects, i.e. individual heterogeneity, in the explanation of the relationship between urbanisation and subjective well-being (Burger et al., 2020; Cardoso et al., 2019; Morrison, 2022; Hoogerbrugge & Burger, 2021; Morrison & Weckroth, 2018).
Characteristics such as the level of education, the type of occupation and, more generally, the income level can mediate the capacity to reap (respectively, mitigate) urbanisation advantages (respectively, disadvantages), and thus affecting individual subjective well-being. There are two main reasons supporting this statement. First, these characteristics are unanimously associated with higher subjective well-being levels (Dolan et al., 2008). Second, cities are the place in which better educated and better paid workers are disproportionately located (and increasingly sort into); cities in fact host more diversified job opportunities with higher salaries, being the place where most affluent people reside (D’Acci, 2019; Castells-Quintana et al., 2020). Several mechanisms concur to this outcome, and are all related to the operation of agglomeration forces in cities, and their increasing strength as city size grows. In large cities, in fact, the skill distribution is especially wide in order to meet the diversified requirements of metropolitan job markets. In particular, agglomeration enables market size to grow, specialisation and, thus, productivity to increase, ultimately leading to greater returns to skills and higher incomes (Duranton, 2019). Moreover, large cities are increasingly innovation hubs and attractive for technology and creative talents, raising more their productivity (and wages) than those of their less talented peers (Behrens & Nicoud, 2014). However, even if highly educated and better-paid individuals are generally disproportionately concentrated in large urban areas, they still represent a minority there; in fact, in cities the proportion of skilled jobs is far lower than that of low skilled ones (Autor & Dorn, 2013).
All this leads to two main conclusions. First, larger cities are the most unequal settings especially in terms of income disparities, suggesting a scaling of inequalities (Castells-Quintana et al., 2020; Glaeser et al., 2015; Sarkar et al., 2016); large cities attract both very skilled and educated individuals earning possibly superstar compensations, as well as individuals at the bottom of the skill and education distribution with unsecure gig-jobs. Spatial inequalities have been recently highlighted as an important source of individual and political discontent (Antonucci et al., 2021; Rodríguez-Pose, 2018). Second, and possibly more importantly from the subjective well-being perspective, education, occupation and income are key determinants of individual life satisfaction. Heterogeneity of individuals in these respects translates first into (income) disparities across people and, second, on opposite effects on subjective well-being (Burger et al., 2020; Cardoso et al., 2019; Morrison, 2022; Hoogerbrugge & Burger, 2021; Morrison & Weckroth, 2018). The final effect on urban subjective well-being depends on the relative size of the different groups of individuals, and can be negative as far as the group of more disadvantaged people experiencing worse or deteriorated living conditions, and thus expressing lower subjective well-being, is larger than the group of privileged ones. With a shortcut, the urban well-being paradox strongly depends on negative distributional effects, which are particularly strong in cities; the larger the proportion of those worse off with respect of the whole population, the larger the inequalities, on the one hand, and the lower the aggregate urban well-being, on the other.
Put more concisely, in cities, there co-exist diverse groups of individuals characterised by different levels of education, job opportunities and earnings, and consequently, perceived life satisfaction. These groups, however, have highly unbalanced sizes, with important consequences on the aggregate perceived level of life satisfaction in cities.
For the minority of highly educated individuals, large cities enable better job opportunities, higher earnings, a rich variety of consumption amenities (Glaeser et al., 2001) and the accessibility to a large spectrum of highly specialised and customised services, not available elsewhere. The positive effect of these enhanced possibilities on their life satisfaction is expected to mitigate the negative impact of urbanization disadvantages on subjective well-being (Burger et al., 2020; Cardoso et al., 2019; Morrison, 2022; Hoogerbrugge and Burger, 2021; Morrison & Weckroth, 2018). Differently, the largest majority of less educated individuals, with inferior job opportunities and limited earnings might find difficult to grasp such advantages and may indeed experience only the downsides of urban life, like congestion, pollution, commuting time and, above all, high rent, with negative consequences on life satisfaction. As far as the latter effect prevails, the outcome is the urban paradox frequently detected in empirical data in a large variety of studies.
Accordingly, the first hypothesis tested in the empirical analysis is:
The negative effect of urbanisation on individual life satisfaction varies across groups of individuals, and it significantly reduces for more educated and more affluent individuals, facing better job opportunities and life conditions.
This hypothesis well aligns with the most recent findings in the literature on the role of compositional aspects and individual heterogeneity for the explanation of the relationship between urbanisation and subjective well-being. However, it neglects an important aspect. In fact, not only location in, but also distance from large cities is likely to matter for individuals’ life satisfaction. In fact, large cities typically supply the broadest variety of goods and services, while a peripheral location may reflect a poor accessibility to the opportunities and advantages of more urbanised settings. Starting from the seminal contribution by Sirgy and Cornwell (2002), a few papers addressed this issue and have shown that rural towns or villages are associated with higher subjective well-being only when they are embedded in highly urbanized regions (Lenzi and Perucca, 2018). In fact, people do not permanently stay in their city or village. Rather, they commute to neighbouring areas for several reasons, such as the possibility of better (and/or diversified) jobs, improved shopping opportunities, consumption amenities, just to name a few of them. Accordingly, individuals benefit from living close to cities larger than their own, since proximity provides them with potential access to urbanisation benefits not provided in the town of residence, consistently with the idea of ‘borrowed size’ introduced by Alonso (1972) (Hoogerbrugge et al., 2022; Lenzi & Perucca, 2021a, b; Meijers et al., 2016).Footnote 2
However, not all individuals are likely to value to the same extent such proximity, and some individual level characteristics can mediate the relationship between distance from urbanised areas and life satisfaction, i.e. the final balance between ‘borrowed size’ and ‘agglomeration shadows’ can depend on some personal traits. For the same reasons highlighted above, better-educated, more affluent individuals, who enjoy better job opportunities, may show preferences for the top-rank services offered in bigger cities and can appreciate more the opportunity costs of distance and commuting.
Accordingly, the second hypothesis tested in the empirical analysis is:
Distance from top-rank cities negatively affects individual life satisfaction, especially for highly educated, more affluent individuals, who enjoy better job opportunities.
The next section provides details on the data and the methodology applied to test these hypotheses empirically.