1 Introduction

The Easterlin paradox has often been referred to as a study in the social sciences, particularly on the topic of happiness, otherwise known as social wellbeing. Richard Easterlin, who coined the term after observing economic growth in America during the 1940s–1970s, observed that in the long run, levels of happiness do not always correspond to a higher level of economic income (Easterlin & O’Conner, 2020). In the short run, higher income does provide a higher level of happiness, and vice versa (Veenhoven & Vergunst, 2014). However, after reaching a certain threshold in income, happiness is not always the consequence (Easterlin, 2016; Easterlin et al., 2010). Various longitudinal studies on developing and developed countries consistently find that economic wellbeing alone may not be the sole variable that provides holistic wellbeing (Starkauskiene & Galinskaite, 2015).

Various studies conducted by Easterlin and other scholarly commentators tend to debate whether the paradox remains relevant if it is considered over a shorter or longer period of time. Nonetheless, the number of studies that correlate noneconomic factors with the Easterlin paradox is not adequate, particularly regarding subjects that touch on the issue of social solidarity, trust, and social identity. Thus, the Easterlin paradox, although it may be hypothetically and evidently true, still lacks the capacity to incorporate other sociological factors, thus prompting the question: If a better economy and income alone are inadequate for increasing happiness, what then are the noneconomic factors that contribute to maintaining and regulating the wellbeing of individuals?”.

This research attempts to tackle this question arising from the Easterlin paradox. Sociologically, we define “happiness” or “wellbeing” not only as a subjective, internal and mental form of individual feeling. Social wellbeing is derived from its “social” aspect; we suggest referring to it as “relational wellbeing”. Relational wellbeing, as it is understood, is contextualized within the framework of social communities and networks that are formed through social bonding (Wissing, 2014). We find it more compelling to consider relational wellbeing, as it provides not only an indicator based on a thin line of subjective feelings within the mind of individuals but also a more holistic approach to understanding how the web of social trust, face-to-face interactions, and participation are involved in family and community circles. Happiness is not only a subjective feeling but also a socially tangible measurement of individual happiness and its relational characteristics. Thus, this study does not provide an analysis that touches on only the psychological layer of happiness but rather one that also considers the sociological layer of relational life satisfaction. It is not economic income alone but also the communal aspect of goods that come into play in the dynamics of relational wellbeing.

Theoretically, we propose that economic goods alone cannot provide an elevated sense of relational wellbeing because happiness, in the social sense, requires more than just the crude ingredients for material wealth, such as income. Relational wellbeing, therefore, could further be described as a designated form of individual happiness built by both types of social goods: first, “material goods”, the vertical dimensions of social inclusion, which are derived from economic and educational background, and also the horizontal dimensions of social inclusion, which are derived from gender and religious group identities, presumably understood as “nonmaterial goods”. Individuals who have gained a better income due to their economic and educational background have a better “safety net” for maintaining a higher level of wellbeing. Furthermore, individuals who have access to nonmaterial goods through social communities based on their gender and religious support groups could in fact further enhance their wellbeing. This could further provide a wider scope for understanding the Easterlin paradox, as we have attempted to do in this research, by correlating social inclusion in the material (vertical) and communal (horizontal) forms of relational wellbeing.

We apply a quantitative research approach that incorporates a comparative study of Indonesian and South Korean society. This study produces several novel and interesting findings. In contrast to previous studies on the Easterlin paradox in the West, this is a comparative study of Indonesian and South Korean society in the East and Southeast Asian regions. The study of various modernizing countries with rapid economic growth, especially in East and Southeast Asia, may provide interesting findings regarding similarities between countries. It does appear that the Easterlin paradox is not only a paradox within the Western world but also within societies in different geographical locations and with different societal conditions (Beja, 2018).

Second, while this study may not be able to provide a time series of economic data on income levels to contrast with life satisfaction in a country, this comparative approach to two countries may provide an alternative take on the Easterlin paradox. This paradox is not only observable through longitudinal time series changes in income and individual happiness but also through a comparative snapshot of two countries. Thus, this research provides a different perspective on the Easterlin paradox from that of previous studies by comparing both developed and developing countries. Indonesia represents an economically developing state, and South Korea represents a more economically developed state; the former has lower income, and the latter has higher income.

By considering both societies in this discussion, we attempt to provide a univariate correlation analysis to further describe and discuss the relevance of the Easterlin paradox, in particular as regards the correlation between the horizontal and vertical dimensions of social inclusion in the context of relational wellbeing. The novelty of this research is that it aims to provide a more sociological sense of the Easterlin paradox in the context of East and Southeast Asian societies and further describe how noneconomic factors could come into play in describing a different perspective on individual happiness that is specifically viewed through a relational lens (White, 2009a, 2009b, 2017, 2019).

2 Literature Review

2.1 Vertical and Horizontal Social Inclusion

There are several facets of the subject of relational wellbeing and social inclusion discussed in this article. The first and foremost topic that grounds this research is the Easterlin paradox (Easterlin, 2013; Li & Shi, 2019). The Easterlin paradox refers to the fact that as a society becomes more economically developed, citizens’ wellbeing decreases. When it is expected that vertical wealth could elevate the vertical aspect of one’s socioeconomic conditions, it is quite surprising to find that this effect is limited or even reversed. Developing countries having less access to these “vertical” dimensions, but on the other hand, they retain a higher level of wellbeing. How is it that poverty and income inequality could cause a higher level of wellbeing? Why does a more economically developed society, instead of having increased happiness, experience a fall in wellbeing? This study is based on this pivotal question.

Social inclusion, when defined on the basis of the vertical dimension, highlights the significance of social strata in sociological explanations of the Easterlin paradox. The higher the income level of individuals on the personal level, the higher the expectation for personal wellbeing. The higher the social strata, the higher the expectation for personal wellbeing. The Easterlin paradox explains this phenomenon on the societal level in economic terms, but sociologically, social stratification is a key explanation for why the Easterlin paradox can also occur on the personal level. It is presumed that the Easterlin paradox does not necessarily apply to developing states such as Indonesia, as income and economic assets are still basic necessities that need to be provided. However, while it is indeed true that having better economic conditions results in feeling “less inferior”, more highly developed states in which basic material needs have been met require more than economic materials to maintain life satisfaction (Inoguchi, 2017; Steckermeier & Delhey, 2019).

Several arguments have been provided to address such concerns. Regarding the socioeconomic component of these arguments, it is shown that as economic wellbeing increases, expectations of achieving a better quality of life also increase. With higher expectations, societal perceptions regarding the betterment of socioeconomic conditions become “desensitized”. Thus, unless individuals are provided with a more drastic improvement in economic and vertical wellbeing, they are prone to be less satisfied, which explains the observation that developed states have lower levels of wellbeing (Giri et al., 2013; Kahneman & Deaton, 2010; Khalek, 2014; Peace, 2001). It is suggested that as a country develops, alternative forms of goods, such as nonprofit-based social enterprises, are necessary to provide economic assistance to individuals who are experiencing material difficulties (Woo & Jung, 2022).

Arguments are also provided from the horizontal aspect of social development. Vertical wellbeing does in fact influence the level of wellbeing experienced by the citizens in developed states; this does not rule out the condition that other aspects of the horizontal dimension do play a role in regulating the wellbeing of individuals. Economic conditions may not be optimal; however, with other forms of horizontal goods, such as social capital, a sense of belonging, and religious practices, individuals are able to attain higher levels of happiness (Gawlik, 2013; Hajbaghery, 2015; Newman & Graham, 2018; Seligman, 1997; Szczesniak, et al., 2020; Viegas et al., 2018).

Furthermore, social inclusion is conceptually parallel to the concept of social exclusion: it has both vertical and horizontal dimensions (Yadav & Longchar, 2018). The vertical dimension of social exclusion is based on social stratification in a particular society. People lack access and opportunities due to poverty, low income, and a low level of education (Ianneli et al., 2018). The vertical dimension of social inclusion speaks to the notion of less personal and more material attributes, which are mainly coloured by class and stratified group membership. The use of vertical wealth and work status are together the components that define the characteristics of this vertical phenomenon, which also plays a role in elevating individuals’ life satisfaction (Burchardt & Hick, 2016; Canelas & Gisselquist, 2018; Steckermeier, 2020; Stewart, 2009).

The horizontal dimension of social exclusion is based on social cleavages, such as those related to primordial relations based on similar ethnic groupings, religious groupings, or ideological groupings,, with concurrent implications for discrimination and a lack of access and of opportunities (Burchardt & Hick, 2016; Burchardt & Vizard, 2011; Chiavacci, 2010; Torry, 2016). The approach to understanding wellbeing as proposed in this study follows the notion of social solidarity, which is particularly derived from the horizontal aspects of social life. The horizontal dimension of social inclusion touches on the notion of personal and social relationships founded on social cleavages and differentiation based on inherent group identities: religious affiliation and gender (Canelas & Gisselquist, 2018; Freimann et al., 2014; Wagenius et al., 2019). Social solidarity includes trust, bonding, and unity through religious ceremonies, rituals, and other forms of gatherings (Etzioni, 1996, 2000, 2011). In other words, through horizontal phenomena, social relationships and personal wellbeing are uplifted (Beaman, 2013; Berger & Hefner, 2003; Villani et al., 2019).

Various literature reviews have shown that membership in horizontally differentiated groups is capable of elevating the wellbeing of the individual. The sense of belonging produced by belonging to certain identity groups is capable of providing a social safety net, fabricating trust and social interactions, as well as a social support system, particularly for individuals who are in need (Churchill & Smyth, 2017; Cukur & Carlo, 2004). These forms of help, which at times may take on relational forms as nonmaterial goods such as social capital, may also circulate economic assistance within communities. Through these identity groups, which serve as a communal bonding mechanism, individuals are not only provided with economic or relational assistance but are also capable of providing friendly assistance to other individuals in similar circumstances, particularly to those in the same network created through group affiliations (Churchill & Smyth, 2020; Torry, 2016). In other words, the relational properties provided by the horizontal dimension of social inclusion complement economic goods and remain relevant to individuals’ relational wellbeing (Yerkes & Javornik, 2020).

Recognizing the horizontal and vertical aspects of the independent variable, this study attempts to test their relevance in the context of a certain social landscape. Indonesia and South Korea are the two countries that are selected: both are Asian countries, but their differences in terms of socioeconomic development are quite substantial. South Korea is more economically developed, more politically stable, more socially and culturally homogeneous, less socially and economically unequal, and has clearer and more consistent public policies. Indonesia is less developed, less stable, more heterogeneous and diverse, and more unequal, with less clear and more inconsistent public policies (Hwang, 2011). These differing contexts could provide interesting grounds for further analysis of the correlation between the horizontal and vertical determinants of social inclusion and the condition of wellbeing (Ianneli et al., 2018; Torry, 2016).

2.2 The Comparative Study of Indonesia and South Korea

The novelty of this study is that it aims to uncover the dynamics of horizontal and vertical social inclusion in relation to the Easterlin paradox. The Easterlin paradox states that as a country becomes more economically developed, there is a consistent trend toward a decrease in wellbeing (Kwon & Kang, 2011; Shrestha, 2014). To answer this issue, it is important to note the various forms of social inclusion, in its horizontal and vertical dimensions of material and nonmaterial goods, that contribute to the individual’s wellbeing, particularly those that are in line with the notion of social integration, trust, and social cohesiveness (Putnam, 2000; Recker & Moore, 2016).

The South Korean and Indonesian cases are representative of the various East Asian and Southeast Asian regions, respectively (Kwon & Kang, 2011; Shrestha, 2014). In this research, two forms of social inclusion are positioned as the “causal” determinants of wellbeing: the vertical dimension of social inclusion, which is more prevalent in the vertical aspects of social stratification such as education and income, and the horizontal dimension of social inclusion, which characterizes the social conditions and individual identities that are captured in horizontal social differentiation. These two forms of social inclusion, the vertical and the horizontal, capture the dynamics that precede the levels of relational wellbeing.

Inoguchi (2004) notes that based on the key dimensions of social capital, which are trust in the relations between individuals, trust in the usefulness of meritocracy, and trust in the social system, societies can be combined into give groups. The first is China and Vietnam; the second is Sri Lanka and Uzbekistan; the third is Malaysia, Myanmar, and India; the fourth is Japan and Korea; and the fifth is Thailand. Based on the three key dimensions of social capital in these ten Asian societies, the key finding is that cultural factors are influential. Trust in the relations between individuals is correlated with Confucian culture, trust in the usefulness of meritocracy is correlated with the legacy of British colonialism, and trust in the social system is correlated with communism or former communist societies.

In a comparative study of the South Korean and Indonesian contexts, Inoguchi (2017) further notes that Indonesian society further incorporates religion as a pivotal factor for increasing happiness, while South Korean society depends more on economic income to build trust and communal relations. Indonesian priorities are health, food, housing, religious devotion, and employment. For South Koreans, the priorities are health, housing, family life, employment, and income. In Indonesia, the vertical dimension of social inclusion is slightly more significant than the horizontal dimension.

Previous studies have consistently found that in the South Korean societal context, individuals place a heavier emphasis on economic goods as their primary source of wellbeing. However, as individuals stress materialism more, their perception of its benefits suffers from desensitization. Those South Koreans who have substituted away from personal and social relations and prioritize economic benefits as core to their pursuit of happiness tend to be the least happy (Lee & Kawachi, 2019). South Korea was ranked as having a high GDP globally in 2018, and yet, based on its happiness report, it is marked lower than other countries with a lower GDP level (Doh & Chung, 2020). In contrast, the Indonesian context shows a different response to economic wealth and, in particular, to this notion of the Easterlin paradox. As Indonesia is still a developing state, higher education, assets, income and expenditure remain significant factors for increasing wellbeing (Landiyanto et al., 2011). An increase in absolute income is followed by an increase in happiness, and the cultural grounds for religiosity and the provision of proactive social assistance in communal forms, otherwise known as “gotong royong” (working together), still remain a prevalent cultural phenomenon (Rahayu, 2016).

Thus, it is sociologically and methodologically both important and relevant to analyse the correlation between the vertical and horizontal dimensions of social inclusion and relational wellbeing in these two different Asian countries. The differences in the objective-structural and subjective-cultural contexts contribute to the social dynamics present in Indonesia and South Korea. Through a quantitative approach, this research attempts to portray and compare the religious capital and relational wellbeing in two major regions in Asia: Southeast Asian countries and East Asian countries. Currently, it is assumed that Southeast Asian countries such as Indonesia, which seemed to have a greater degree of horizontal social inclusion, seem to have produced greater wellbeing among their populations than countries such as South Korea (Neuman, 2007; Seda, et al., 2018).

3 Conceptual Framework

3.1 Independent Variable: Social Inclusion

The focus of this study is on two major concepts: social inclusion and relational wellbeing. This study tests the influence of the horizontal and vertical forms of social inclusion as independent variables with relational wellbeing as the dependent variable. Social inclusion is the feasibility of individuals attaining social resources from their social environments to enhance their wellbeing. The vertical dimension of social inclusion refers to access to resources based on social stratification in a particular society, including educational resources and income, and its implications for lack of access and lack of opportunities. Horizontal-based social inclusion refers to the social cleavages present in a specific society, including different groupings based on primordial associations such as ethnic groups, religious groups, and ideological groups, and its implications for discrimination, lack of access and lack of opportunities (Torry, 2016; Wagenius et al., 2019).

In this study, we argue that the horizontal and vertical dimensions of social inclusion are related to relational wellbeing, our dependent variable. The vertical dimension of inclusion, which is encompasses assets, income level, occupational background, and educational level, was included, while the horizontal dimension of inclusion includes items related to gender group, religious affiliation, region of origin, and race/ethnicity/nationality group identities. It is expected that these dimensions of the independent variable have certain correlations and effects on the dependent variable.

We argue that the dimensions of social inclusion, both the vertical and the horizontal, have significant implications for individuals’ relational wellbeing. However, we would also like to emphasize that not only the “hard economic” or vertical aspects of social inclusion have an influence but also that the “soft noneconomic” or horizontal aspects of social inclusion can have significant results on individuals’ relational wellbeing. Relational wellbeing is defined as the individuals’ sense of social happiness, which is cultivated through subjective perceptions of trust, personal interactions with fellow individuals, and social engagement in communal activities.

3.2 Dependent Variable: Relational Wellbeing

The understanding of wellbeing is often associated with the notion of happiness and life satisfaction (Alipour et al., 2012; Veenhoven, 2015). Previous studies have often associated economic satisfaction with an individual’s sense of happiness, which in the positivist sense is termed “social wellbeing”. As this study attempts to further widen the meaning of “wellbeing” to include not only the reception of goods by the individual but also the social bonds which the individual is capable of reproducing, we would like to reframe it as “relational wellbeing”. Relational wellbeing, as it is already termed, is composed of the social dynamics involved in the perception of trust, everyday social interactions, and social engagement in communities (Wissing, 2014). This aspect of social wellbeing differs from the purely individualistic and subjective sense of happiness related to social communities and from purely objective societal conditions (Koo et al., 2016; White, 2015, 2017, 2019). Relational wellbeing reflects not only the individual’s subjective sense of happiness but also the individual’s relational capacity to produce happiness through social relationships (Appau et al., 2019; Burchardt & Hick, 2016; Burchardt & Vizard, 2011).

We define three indicators for relational wellbeing, i.e., trust or perceptions, interactions, and participation. Perceptions (trust) are measured by the level of trust among respondents in their interactions within their own communities, such as among family, neighbours, friends, and colleagues. Interactions are measured by the intensity and frequency of interactions and the number of people who have interacted with the respondents within their own communities. Participation is measured by the intensity and frequency of respondents’ participation in common activities within their own communities.

4 Data and Method

The data in this paper were collected using survey methods. This study utilizes the dataset gathered from the social wellbeing survey conducted by the International Consortium for Social Wellbeing Studies led by Senshu University Japan. The survey was conducted in the seven (7) participating consortium countries, which are Japan, South Korea, Taiwan, Indonesia, Vietnam, Thailand, and the Philippines. The entire consortium team holds discussions in regular workshops each year to ensure that the dataset, survey, and other findings are adequate and useful for comparing countries to explain social wellbeing and its determinants. In a number of consortium member countries, the survey was carried out in stages over the course of several years to ensure that there was feedback from previous studies.

All of the consortium's Social Well Being survey datasets have been harmonized and weighted by the Korea Social Science Data Archive (KOSSDA), Asia Center, Seoul National University team. This team has weighted the data, aligned categories, and performed final data cleaning steps so that they are methodologically valid for making comparisons between countries. In the consortium workshops, there is always room on the agenda for discussing certain situations/contexts that result in significant changes in the span between survey years between countries (Babbie, 2014). In this case, turmoil from an economic crisis, general election or other event that has the potential to affect the differences in the data between Indonesia and South Korea occurred in different years.

The number of observations from the Indonesia and South Korea data discussed in this paper totalled 3248, with the Indonesian sample including 1248 observations and South Korea totalling 2000 observations. The study population was household heads aged 18–64 years old, and the study sample was selected through multistage cluster sampling (Healy, 2013) to capture all characteristics related to social wellbeing and social inclusion, such as the composition of the sample in terms of the level of education, level of income, occupation, and residence in urban and rural areas, and the composition in terms of gender, ethnicity, and religion. Although the Indonesian sample is smaller than the South Korean sample, it was drawn under a stratification that accounted for variation in religion, ethnicity, social class, and the characteristics of the rural–urban population in Indonesia. Sampling was carried out in areas that are representative of the conditions experienced by the Indonesian population.

Data from the questionnaires are processed by indexation (combining indexes) and recategorization to make data interpretation and inference easier. Based on the questionnaires, the score indices range from 0 to 5, with “0” as the minimum score and “5” as the maximum score, to measure the average aggregate values of the social inclusion items, in terms of both the vertical and the horizontal dimensions, and relational wellbeing as the independent and dependent variables, respectively. Univariate analysis is carried out by comparing means at the variable and dimension levels (Neuman, 2014). To examine the bivariate correlation between the independent and dependent variables, we estimate Pearson correlation coefficients and apply linear regression analysis. The whole process was performed using statistical software (SPSS). It is assumed that estimating correlation coefficients would allow for a descriptive analysis of the possible direct and indirect correlations between the two variables and that the regression analysis would describe the asymmetrical influence of the independent variables on the dependent variable. Hence, an adequate analysis of the relation between social inclusion, both in its vertical and horizontal forms, and relational wellbeing is provided.

5 Data Analysis

5.1 Univariate Analysis

In this section, we provide a brief univariate analysis of the various score indices from a comparison of the Indonesian and South Korean cases regarding the correlations between the vertical and horizontal dimensions of social include and relational wellbeing. As shown in the table below, it is observable that the Indonesian respondents have a higher relational wellbeing score (3.50) than the South Korean respondents (2.52), with a maximum score of five (5). This shows that the ability to receive and produce happiness based on social and relational activities is indeed stronger in the Indonesian case (Table 1).

Table 1 Relational wellbeing index
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As we further proceed with our more detailed examination, different facets of relational wellbeing are found: trust, interactions, and participation. For each facet, a further description is provided to explain the characteristics of each item. Indonesian society has an index value of 3.50 for trust, 3.93 for interaction, and 3.08 for participation. South Korean society has an index value of 2.93 for trust, 2.67 for interactions, and 1.97 for participation. The strongest dimension of relational wellbeing relative to the other dimensions for both countries is the component “trust”. However, a significant difference is found within the interactions component and even more so for participation. While for Indonesians, face-to-face interactions with relatives and neighbours are the most frequent, South Koreans have significantly fewer of those types of interactions. Instead, South Korean respondents tend to show a higher likelihood of interacting with their friends and acquaintances than their family and relatives. Furthermore, while Indonesian and South Korean societies have both indicated strong participation in their community and traditional festivities, in general, Indonesians still have more frequent and intensive social-communal activities than South Koreans. Relational wellbeing still appears to be higher in Indonesia than in South Korea, and the developing country respondents show a stronger affinity for trust, interactions, and participation than respondents from a more developed state (Table 2).

Table 2 Perceived advantages received by respondents based on the vertical and horizontal dimensions of social inclusion
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We turn to examine the comparison between the vertical and horizontal dimensions of social inclusion in Indonesia and South Korea. Once again, in this univariate comparison, Indonesia has a higher index score for the vertical and horizontal dimensions of social inclusion than South Korea. It is interesting to note that both Indonesian and South Korean society have a slightly stronger emphasis on the horizontal dimension than the vertical dimension of social inclusion, demonstrating that affiliations with religious, racial-ethnic, gender and local identity groups appear to be prevalent in the respondents’ experiences. Compared to horizontal affiliations, economic income, work status, assets, and education provide important advantages, although their score indices are slightly weaker.

Among the Indonesian respondents, religion has the highest index score. In general, it appears that the other horizontal dimensions of social advantage still retain a higher index score in Indonesia, ranging from 3.29 to 3.78, compared to the range of score indices for South Korea, which is 2.62–2.67. This tells us that in general, Indonesian respondents find that their race-ethic identities, gender, religion, and local area of origin are more beneficial than South Korean respondents. Nonetheless, South Korea, as a developed country, has retained the horizontal dimension of social inclusion, but in Indonesia, a developing country, group identities and their inclusive capacity are still prevalent, especially on in terms of religion, which is the dominant element for communal goods.

If we relate the univariate findings to the Easterlin paradox, it appears that the vertical dimension of receiving access to education, income, assets, and occupation is somewhat confirmed: the more developed the country, such as South Korea, the less sensitive the respondents are to having received such vertical forms of socioeconomic advantage. While respondents from the developing country of Indonesia do perceive socioeconomic advantage as crucial, the advantages of the horizontal forms of socioeconomic cleavages appear to be more prominent. However, the univariate findings only show the extent of the statistical surface that describes the condition of the respective country respondents. The bivariate analysis between the independent variables representing the vertical and horizontal dimensions of social inclusion and the dependent variable of relational wellbeing is described in the next section to further deepen our understanding of the relevant correlations.

5.2 Bivariate Analysis

As stated in the introduction, social inclusion or the opportunity to receive the same treatment in interactions is a very important explanatory variable for relational wellbeing. Regarding social inclusion itself, empirically speaking, it appears to have different impacts depending on the respondents’ socioeconomic characteristics, both those related to the vertical dimension (level of education and income) and those related to the horizontal dimension (gender and religious identity). This study emphasizes the argument that the more conditions for social inclusion that are present, the stronger their effect on relational wellbeing. This means that the more inclusive opportunities that exist for all groups with different socioeconomic attributes (vertical and horizontal dimensions), the better the conditions for relational wellbeing are reflected in the level of their trust, interactions and participation. What is the relationship between these two variables in Indonesian and South Korean society?

The correlation between these two variables is relatively weak, but there are positive correlations between the variables for Indonesian and South Korean society. This is in line with the argument of this study that social inclusion is indeed a direct determinant of relational wellbeing. However, the relationship is classified as “weak”, which indicates that although social inclusion has an effect on relational wellbeing, its influence is small for both Indonesian and South Korean society (Figs. 1, 2).

Fig. 1
figure 1

Pearson correlation coefficients between social inclusion and relational wellbeing. Note: Significance of 0.05 is indicated with *, significance of 0.01 to 0.049 is indicated with **, and significance of 0.00 is indicated with ***

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Fig. 2
figure 2

Multiple regression analysis of the effect of social inclusion on relational wellbeing

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This can be explained by the findings from a number of studies that show that both Indonesian and South Korean people still internalize and are accustomed to values, norms, and patterns of interactions based on the attributes of seniority, gender, work-based socioeconomic stratum, and income so that the two dimensions of the social inclusion variable are not highly correlated with relational wellbeing. In Indonesian society, for example, the strong patriarchal values held by a number of ethnic and religious groups means that inclusion based on gender does not significantly affect relational wellbeing (Tables 3, 4).

Table 3 Pearson correlation coefficients and multiple regression analysis between social inclusion and relational well being
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Table 4 Pearson correlation coefficients and multiple regression analysis between social inclusion and relational well being
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The statistical findings show that there is a significant symmetrical correlation between the independent and dependent variables. The correlation between both variables, and within both countries, tends to be distributed among every component. Both the Indonesian and South Korean respondents demonstrate that their relational wellbeing influences and is influenced by both the vertical and the horizontal forms of social inclusion. However, the South Korean respondents demonstrate a stronger correlation between social inclusion and relational wellbeing than the Indonesian respondents. As we further analyse the components of social inclusion, we find familiar results. In general, the correlation between the independent and dependent variables is significant for both Indonesian and South Korean society. However, race/ethnicity/nationality among Indonesian respondents and religious group identity among South Korean respondents do not exhibit a significant symmetrical correlation.

As we move to the regression analysis, the asymmetrical effect of social inclusion on relational wellbeing is further identified. In both Indonesian and South Korean society do we find that the vertical and horizontal forms of social inclusion positively influence relational wellbeing. Specifically, material goods from the vertical dimension of social inclusion primarily have the capacity to increase trust. Trust, as a component of relational wellbeing, is a positive perception of others. Furthermore, as we focus on the horizontal forms of social inclusion, it is found that respondents find that face-to-face interactions benefit from networking among social communal groups. In the Indonesian case, respondents’ relational wellbeing tends to show a stronger correlation with horizontal forms of social inclusion, cultivating both interactions and participation; the vertical form of social inclusion cultivates only trust. In the South Korean case, the regression analysis shows that both the vertical and the horizontal forms of social inclusion are statistically significant, with all dimensions influencing relational wellbeing.

The regression analysis shows that the effect of the social inclusion components on relational wellbeing appears to be significant for every item for both countries. However we further observe vertical forms of social inclusion. In comparison, there are several differences to be noted between the respondents from Indonesia and South Korea. Among the South Korean respondents, the vertical dimension of social inclusion is slightly stronger in influencing relational wellbeing than the horizontal dimension. In contrast, among Indonesian respondents, the horizontal dimension of social inclusion tends to have a stronger influence on relational wellbeing. It is further shown that the relational wellbeing of South Korean respondents tends to be influenced by both the vertical and horizontal forms of social inclusion, with relational wellbeing being significantly affected by every item, but the Indonesian case tends to differ. Vertical forms of social inclusion such as material sufficiency elevate trust but do not increase face-to-face interactions and participation in social activities. Horizontal forms of social inclusion, such as the sense of belonging to a social network and group identification, may strengthen social interactions and community participation but do not elevate trust significantly.

In the context of the pluralistic Indonesian society, horizontal inclusion attributes such as the equal treatment of individuals with different genders and different religious and ethnic identities have almost the same effect as the attributes of the vertical dimension in terms of their correlation with relational wellbeing. Group communities, especially those that build up religious identity and affiliation, tend to have a stronger influence on relational wellbeing. Vertical forms of social inclusion, including education, income, and assets, but specifically occupation, are important for individuals’ social life satisfaction. The more homogeneous South Korean case also shows a familiar pattern in which vertical social inclusion, with its stronger influence, elevates relational wellbeing. However, among the horizontal forms of social inclusion only race/ethnicity/nationality and gender identity groups tend to provide better relational wellbeing; region of origin and religious group identities tend to be less influential (Table 5).

Table 5 Pearson correlation coefficients and multiple regression analysis of the social inclusion indicators and the dimensions of relational wellbeing among Indonesian and South Korean respondents
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The table above provides a detailed view of the correlation between each component of social inclusion and relational wellbeing. If we observe the Pearson correlation coefficients, we find significant correlations for every item for both the Indonesian and South Korean cases. However, in terms of comparison, there are several points to observe. First, in the South Korean case, the vertical and horizontal forms of social inclusion have a stronger correlation with relational wellbeing than in the Indonesian case. Every social inclusion item is consistently more important to South Korean respondents, and this is true for all the dimensions of relational wellbeing.

However, in terms of differences, we can observe that in the South Korean case, the emphasis on vertical forms of social inclusion is more consistent than in the Indonesian case. In the Pearson correlation analysis, certain elements, such as income and assets, have consistently stronger correlations with the dimensions of trust and interactions. For the horizontal form of social inclusion, race/ethnicity/nationality and gender cultivate trust, while race/ethnicity/nationality and religious identity are correlated with social interactions, and the vertical forms of social inclusion are important elements for participation. In the regression analysis, we find that there are several items that drive the influence of social inclusion on relational wellbeing. The regression analysis shows that in the South Korean case, assets, as an element of vertical social inclusion, are consistently correlated with elevated trust, interactions, and participation. Race/ethnicity/nationality and gender group identity influence trust, and religious group identity has a slight influence on interactions and participation.

In the Indonesian case, the findings tend to differ from those for the South Korean respondents. While vertical forms of social inclusion remain important, we find that the horizontal forms of social inclusion also play an equal role in elevating relational wellbeing. In the Pearson correlation coefficient analysis, it appears that all the elements of vertical social inclusion are correlated with the dimension of trust, that occupation and income are correlated with interactions, and that occupation is correlated with participation. Among the horizontal forms of social inclusion, race/ethnicity/nationality, gender, and region of origin are correlated with trust. For interactions, it appears that all the elements of horizontal social inclusion are correlated, with both region of origin and religious group identity being the more dominant elements. The attributes of horizontal social inclusion, except for gender group identity, are correlated with participation. In the regression analysis, there is less consistency in all the relations between the dimensions of social inclusion and relational wellbeing for the Indonesian case, in which only education and gender identity cultivate trust, only region of origin elevates social interactions, and only occupation to increases participation in social communities.

The variations in the vertical and horizontal attributes in Indonesia are relatively similar, and there are no significant gaps in either dimension of social inclusions. The issue of identity politics and the equality of treatment for different gender, ethnic and religious groups is increasingly salient and remains important in Indonesia; perhaps it functions as compensation for economic inequality in the current Indonesian situation. In contrast, in South Korean society, which is more socially homogeneous than Indonesian society, assets, which are material economic goods, remain more significant (Hwang, 2011). It appears that the South Korean government has more established and consistent public policies to ensure equal opportunities and access to public services for all its citizens. Furthermore, the equality gap between the social classes is not very wide in South Korean society compared to that in Indonesia. This is also one major factor that can explain the influence of the vertical dimension of social inclusion in terms of the correlations between the dimensions of social inclusion and relational wellbeing.

6 Discussion

This study addresses the Easterlin paradox by discussing the question of whether the vertical dimension of social inclusion has an effect on social happiness (specifically relational wellbeing) by comparing Indonesian and South Korean respondents, i.e., respondents from a developing and a developed state, respectively. In comparisons of South Korea with Indonesia, the Easterlin paradox is relevant because it is presumed that with a higher level of economic income, South Korea will have a lower level of wellbeing than Indonesia. Furthermore, this research also widens the scope of discussion by incorporating the horizontal dimension of social inclusion to explain the role of social communities and affiliation based on group identities in determining relational wellbeing.

As we have discussed regarding the univariate findings, the effect of the vertical dimension of social inclusions is indeed found to result in lower mean scores for relational wellbeing in South Korea than in Indonesia. This explains the diminishing relevance of economic and material goods in a more developed state than in developing states. Furthermore, the horizontal dimension of social inclusion remains prevalent in both Indonesian and South Korean society, although it is perceived as “more important” in Indonesia than in South Korea. The horizontal dimension explains the role of social communities based on group affiliation and identities as important dynamics in the provision of a “social safety net” for individuals in need of assistance. Regarding this aspect of the analysis, we are able to state that the Easterlin paradox could be proven true: that economic and material goods alone are not sufficient for the individual. As a nation-state is developing, the vertical dimension of social inclusion is indeed perceived to be important. However, in the long run, as the nation-state becomes more developed, it is necessary to have goods from both the vertical and the horizontal dimensions to fulfil individuals’ needs.

As we dive deeper into the dynamics of the effect of horizontal and vertical social inclusion on the relational wellbeing of each respective country through bivariate observations, we find several interesting results. In Indonesia, a developing country, it appears that the effect of vertical goods such as economic income are functional for increasing both trust and social interactions. Horizontal goods such as social communities are more relevant for forming face-to-face interactions while have no effect on trust and participation in various communal activities. In South Korea, a developed country, it is found that materialism in terms of the vertical form of economic goods remains important for building social happiness, and group identities are only useful for creating a sense of trust, but result in missed opportunities to create a fabric of face-to-face interactions, let alone participation in communal activities.

If we put the Indonesian and South Korean respondents onto a “timeline” of social change, we would observe that horizontal group affiliations change from facilitating “face-to-face” social interactions into helping build an individualistic “sense of trust” as a country proceeds into a more economically developed form. Respondents from developing countries such as Indonesia tend to show a greater need to meet other people through social and physical means, while they may not always feel the need to share deep trust. However, respondents from developed countries such as South Korea report no requirement to meet others or participate in activities but only to develop an inner-group feeling within one’s membership group. The transition from “social meeting to individual feeling” is, in one peculiar sense, representative of the changing form of social engagement in communities during the transition from an economically developing state to a developed state.

Regarding the vertical dimension of social inclusion, we find in the bivariate analysis that vertical goods such as economic income, occupation, educational level, and assets remain relevant to relational wellbeing in both countries but are particularly important for South Korean respondents than for Indonesian respondents. In this regard, we can understand that in developed countries, economic materialism is still dominant in building relational wellbeing. In contrast, we can also see that relational wellbeing in South Korea tends to depend solely on the vertical dimension of social inclusion, which may lead to stagnant life satisfaction. The univariate analysis shows that the vertical dimension of social inclusion, i.e., economic goods, may lose its “effect” in South Korea, as individuals are less sensitive to its perceived advantages. While South Korean respondents are losing their sensitivity to perceptions of vertical goods as essential benefits, they are still dependent on economic and material goods for their relational wellbeing.

To further discuss the notion of the Easterlin paradox, to some extent, we find some confirmation that the vertical dimension of social inclusion may no longer be perceived as a benefit in South Korea, a developed country, compared to Indonesia. There is a “hint” that socioeconomic attributes still retain their positive effects, although not on a significant scale, on social happiness; in other words, relational wellbeing appears to still be dependent on economic goods. Alternative forms of social inclusion such as group affiliation and identity might function as a “social cushion” to compensate for the diminishing utility of economic and material goods. For developing countries such as Indonesia, vertical goods are still necessary for increasing relational wellbeing; for developed countries such as South Korea, horizontal goods, which are derived from social capital and social communities, should also be reinforced to compensate for and balance the importance of vertical social inclusion.

7 Conclusion

The relation between social inclusion and relational wellbeing is dynamic in nature. This specific research contributes to a better understanding of how the vertical and horizontal forms of social inclusion are related to social happiness, specifically relational wellbeing. Comparing Indonesia and South Korea has resulted in a deeper knowledge which debates the Easterlin paradox that both material and nonmaterial goods are important for sustainable and balanced socioeconomic development. Material factors are more highly correlated with relational wellbeing at the individual level than at the community level, where relational wellbeing is more highly correlated with nonmaterial factors. The novelty of this research is that in the context of societal development, both the vertical dimension and the horizontal dimension of social inclusion are correlated with relational wellbeing. Sustained relational wellbeing requires inclusive government policies at the personal, relational, and societal levels.

A limitation of this research that demonstrates the effect of social inclusion on relational wellbeing is that this study attempts to confirm its theoretical framework in terms of the Easterlin paradox. In other theoretical logics, the relationship between these two variables, social inclusion and relational wellbeing, can be seen as symmetrical. As one country builds up vertical goods, the level of relational wellbeing tends to stagnate or fall. The Pearson correlation coefficient and regression analysis implies policy formulations. The core issue of reduced happiness is due to the imbalance in vertical and horizontal social inclusion. It is these two independent variables that various policy-makers should consider. The trajectory of socioeconomic development should incorporate not only economic income but also a holistic approach and an appropriate balance for increasing human wellbeing that is applicable to both developing and developed states. However, the author has attempted to carry out a number of statistical analyses, such as factor analysis and multiple regression, to reduce these limitations.

While this study has provided a descriptive account of the Easterlin paradox in regard to the effect of social inclusion on relational wellbeing, we find that there is still room for further research to observe the roles of other variables. Relational wellbeing or social wellbeing has often been the designated object of development, in which case the population’s level of happiness is the indicator of developmental success. However, it is possible that relational or social wellbeing could in fact take a more active position in society as an independent variable. The dynamic of social inclusion, or society’s overall perception of and participation in vertical and horizontal advantages, could be influenced by social or relational wellbeing. As a society becomes more satisfied with life, it is probable that its members will, in some sense, become proactive in providing vertical and horizontal goods for their social communities. Future research on the active role of relational or social wellbeing is recommended.