The impact of wealth on subjective well-being: A comparison of three welfare-state regimes

This paper provides new insights into the association between economic standing and subjective well-being (SWB) among aging individuals in three industrialized countries: Germany, Israel, and Sweden. Specifically, we compare the effects of wealth, in line with the growing consensus that wealth is an important determinant of economic standing alongside income, on SWB across three welfare-state regimes: conservative (Germany), liberal (Israel), and social-democratic (Sweden). Drawing on needs theory, we hypothesize that individuals of poor wealth would report lower levels of SWB in all countries. We expect, however, the association between poor wealth and SWB to be stronger in the liberal system (Israel) and weaker in the conservative system (Germany) with the weakest effect found in the social-democratic system (Sweden) due to differences in the extent of social benefits each welfare-state regime provides its residents. To test our hypotheses, we utilize data from the Survey of Health, Aging and Retirement in Europe (SHARE(1)). Results indicate that income and wealth explain a greater part of the variance in SWB when taken together. We find a 'poor penalty' on SWB in Germany and Israel while in Sweden wealth has no impact on SWB. Finally, when controlling for subjective economic hardship (needs), the negative effect of poor wealth on SWB disappears in Germany, but maintains significance in Israel, suggesting that needs theory alone cannot explain the poor penalty in Israel. In conclusion, our findings suggest that the welfare-state has an impact on the wealth SWB relation and that the mechanisms that underlie this relation operate differently in Germany and Israel. (C) 2013 International Sociological Association Research Committee 28 on Social Stratification and Mobility. Published by Elsevier Ltd. All rights reserved.