What contributes to life satisfaction in transitional Romania? *

Transcription

1 What contributes to life satisfaction in transitional Romania? * Daniela Andrén and Peter Martinsson Department of Economics, Göteborg University, Sweden March 27, 2003 Abstract This paper analyzes subjective well-being in Romania in 2001, 11 years after the collapse of the communism and the beginning of the transition to a market economy. Using a survey among 1770 individuals, we analyze the effects of various variables on self-reported measures of life satisfaction, and find that life satisfaction increases with housing standard, health status, economic situation, education, trusting people and living further from town, while it decreases by unemployment. Key words: General Life Satisfaction, Subjective well-being, Domain specific satisfaction, Romania, transition economy. JEL code: I31. * We would like to thank participants at The Paradoxes of Happiness in Economics conference in Milan for useful comments. The usual disclaimer applies.

2 1. Introduction This paper aims to analyze life satisfaction in Romania a decade after the revolt and coup in December This was the starting point for the transition from a command economy (when, excluding nomenclatura, citizens were equal in many aspects of life such as income, housing, access to education, art and cultural events, clothing, etc.), 1 to a market based economy (when citizens are faced to inequalities in income, housing, clothing, etc.). In the years following the revolution, there were optimistic views of Romania s own ability to transit into a democratic country with a free-market economy, especially among outsiders such as the International Monetary Fund (IMF) and World Bank, but there were also some domestic pessimism on the time needed to recover mentioning that the process would take more than a generation (McCollum, 1998). In the beginning of the 1990 s Romania received substantial assistance from different sources such as governments, public and private organizations (e.g., IMF and World Bank) in order to shorten the time needed for the transition, but it proved however to be much more difficult than initially expected. As a result of problems in the economy, new features appeared such as inflation, unemployment and decline in real income and widening income gap, but also, as a result of the revolution, the degree of freedom increased substantially. By using survey-data from May 2001 s Public Opinion Barometer, this paper investigates what factor that influences subjective well-being. There is a recent and rapidly growing interest among economists to analyze subjective well-being (see e.g. Blanchflower and Oswald, 2002, Easterlin, 2001, and Frey and Stutzer, 2000, 2002a, 2002b). Our analysis follows the standard approach applied in empirical studies on 1 Pacepa (1987) mention that to the ordinary Romanian people, the world nomenclatura means the elite, a social superstructure recognizable by its privileges. 2

3 subjective well-being in economics (e.g. Frey and Stutzer, 2002, Blanchflower and Oswald, 2000, Easterlin, 2000), where subjective well-being is normally collected by asking respondents to indicate their degree of happiness or life satisfaction on a multipoint scale. 2 Ng (1997) argues that people s ultimate objective is happiness, while money is only one tool to increase their overall happiness, and moreover there is also much evidence that self-reported subjective well-being is a quite good measure of individual well-being in comparison to other variables such as individual income or wealth (see e.g. Frey and Stutzer, 2002a, 2002b). The results from such studies on subjective well-being have provided direct information on what affects individuals subjective well-being. For example the insight by Clark and Oswald (1994) and Di Tella et al. (2001), that unemployment causes larger welfare losses than previously assumed since not only lower income affects subjective well-being, but also the fact of being in an unemployed state per se seems to out weight the assumed positive effect of increased leisure. Thus, the strength of analysing subjective well-being is that it allows us to make conclusions that cannot be made when using the conventional economic tool box. Given the fairly equal starting point in terms of living standard for most Romanians at the time of revolution in 1989, this allows an interesting analysis on how the transition has affected different groups in the Romanian society some 11 years later. One interesting outcome of our analyses, except from what affects happiness, is to learn whether future policy formulations can promote improvement in subjective well-being, where 2 It should be noted that happiness studies have traditions in other areas of social science such as in psychology (e.g. Kahneman et al, 1999) and sociology (see e.g. Veenhoven, 1996). 3

4 potentially target areas could be the health care sector, unemployment and social security. 3 The paper is organized as follows. Section 2 briefly describes the changes in Romania over the last decade. Section 3 describes the household survey, while Section 4 presents the results from the econometric analysis. Finally, Section 5 summarizes and concludes the paper. 2. The evolution of the ingredients of happiness in Romania This section summarizes the evolution of the main determinates of well being in Romania, presenting their status before December 1989 and afterwards. Before December 1989, Romania was characterized by state-owned companies and a centrally planned economy, organized around a national plan. The main components were the 5- year plans and long-term directives for the next 10 years, with clearly specified objectives for each year. 4 The communist regime did not only control the economy but also the citizens. This was done directly by for example limited freedom of press and restriction on migration, 5 and also indirectly by the secrete police, Securitate, 6 (who seem to have under control everything about all Romanians). Under these conditions, it 3 For example Di Tella et al. (2001) results suggest that people on average would be indifferent in terms of happiness between a 1% increase in unemployment rate or a 1.7% increase in the inflation rate using a quarter of million respondents from 12 European countries and the US. 4 The first 5-year plan covered the period , and there were eight 5-years plans until All these plans were mainly designed for an intensive labour demanding industrialisation. 5 Intracountry migration could be allowed to move due to marriage, schooling, or getting a new job. However, a new employment was often conditional on having a domicile close to the workplace. In comparison to the other Eastern Europe countries, Romania had a relatively liberal emigration policy until the early 1980s when the situation was tightened as a response by the government to the drain of the country's skilled workers and its concern for the overall deterioration of the labour force. After 1989, both ethnic migration (especially among ethnic Germans and ethnic Hungarians), and labour migration increased Fassmann and Münz (1995). 6 The secret police, called Securitate, was the government s main supporting force, while the communist organisations have control to the lowest and the younger level. 4

5 is expected that there was a low level of trust on other people before December 1989, which might increased afterwards. According to Inglehart (1999), relatively high levels of subjective well-being and interpersonal trust are conducive to the stability of democratic institutions. They are not necessarily conducive to transitions to democracy; quite the contrary, low levels of subjective well-being and interpersonal trust may play an important role in the collapse of authoritarian regimes. According to measures of political and civil freedom used by the Freedom House, Romania has improved substantially since The political freedom index measures whether a government came to power by election or by other means, whether elections, if any, are free and fair, and whether an opposition exists and has the opportunity to take power at the consent of the electorate, while civil freedom index measures concentrate on the freedom of the press and the rights of individuals to debate, to assemble, to demonstrate, and to form organizations, including political parties and pressure groups. The index is measured on an integer scale between 1 and 7, where 1 is the highest level of freedom. Until 1989, Romania scored 7 on both measures but has since then gradually improved to 2 on both measures in 2000 (Gwartney and Lawson, 2002). 7 The political power has been within the center-left orientated parties with an exception of a 5 year period during , when political parties located at the center-right on the political scale, mostly conformed by radical reformists, were in power. However, the transition of the economy has not been a smooth and steady process with rapid economic growth as predicted in The effects of the transition 7 The difference to other former Eastern European countries is that Romania has had a slower rate of improvement measured by the freedom indices. However, in 2000 Poland, Czech Republic, Slovak Republic, Hungary and Bulgaria all scored 2 on civil freedom, while all these countries, except Bulgaria, scored 1 on political freedom (Gwartney and Lawson, 2002). 5

6 problems can be read by increased unemployment, declined in real income and inflation. Maniu et al. (2001) discuss the development and growth of the Romanian economy, both during the transitional period following the fall of the communist regime in 1989 and within a broader historical context, and conclude that the inability among enterprises to re-allocate their resources and efficiently adjust their production to the changing requirements of the market caused the recession during A second severe recession occurred during , and this was, at least partly, caused by reduction in investment and the persistence of a negative current account balance REF. Following the decline in the economy, a new experience for the Romanians appeared; unemployment, and the number of unemployed increased by approximately 4 million during the period 1989 to 2001 in a country with approximately 23 million inhabitants (Romanian National Institute of Statistics, ). Although the employment rate has decreased throughout the period, with exception for 2001, the rate of reduction has substantially decreased over time. The increase in unemployment has not been evenly spread between different sectors in the economy. The sharpest decline in employment is found in the industrial sector, while a smaller decline is found in other sectors like transport, hotels and restaurants. As a result of these changes, the agriculture sector, which includes self-employed farmers, has become the largest sector in the economy in terms of numbers of employed. This is partly explained by the increased unemployment in other sectors in the economy, but also because of the reformation in the agricultural sector that made many people land owners in the beginning of the 1990 s. Moreover, the agricultural sector is characterized by very low incomes. The recession in the economy has hit the level of real earnings, which has almost been reduced by 50% since 1990 (Romanian National Institute of Statistics, XXXX). In 6

7 the early 1980 s the wage system started to change from a fixed wage policy, where 20% of the salary depended on the performance defined by the fulfilment of the set plans of the enterprise. With an average per capita annual income of approximately US$1,000 in 1989, Romanian workers remained among the most poorly paid in Europe REF. Since 1990, many of the features of the old Communist wage system have been abolished. Wage determination was decentralized to company level, independently of their ownership with a few exceptions of enterprises known as regii autonome, 8 as a result of the new Wage Law from 1991, where collective and individual negotiations determined the wages. During the last decade the social security system has improved by increased unemployment benefit and support allowance, where the latter is received by individuals not entitled to unemployment benefit. Moreover, the sharp decline in the population of workers has affected the Pay As You Go financed Romanian pension system, which triggered a reform of the pension system focusing on higher contributions over a longer period REF. During the last decade the real pension support has decreased by almost 55%, while unemployment benefits and support allowance have been in the same proportion of minimum salary of the period (Romanian National Institute of Statistics, XXXX). Some discussion on poverty line? In summary, the recession in the economy have most likely hit the citizens unevenly by increased unemployment and increased income spread. Frey and Stutzer (2002) presents average self-reported life satisfaction for various countries obtained from World Values Survey. Romania scores lower than all former Eastern European countries except Bulgaria, but on the other hand higher than all the former Soviet Union 8 In 1990, the state-owned enterprises were divided into two groups: regii autonome and commercial companies. The former group consists of about 350 companies, but they account for 47 percent of total SOE assets. Earle and Telegdy (2001) report that the average employment of the regii was 2988 (357 firms), compared to an overall Romanian average in the 38,833 firms of 145 employees. 7

8 countries. 9 The lower degree of life satisfaction is compatible with the fact that Romania, and also Bulgaria, have progressed slower than the rest of the former Eastern European countries. 3. Data We use the May 2001 survey from the Romanian Public Opinion Barometer database supplied by the Open Society Foundation. Collection of the data was based on sampling in three stages: (i) the sample is stratified by 18 geographic areas, residence (urban and 4 types of urban localities) and degree of development of rural localities (3 categories), (ii) within each of the sample units a sub-sample of localities was randomly selected and (iii) within each of these a sub-sample, non-institutionalized adult population was randomly selected from the last electoral register. The sampling method is designed to produce a representative sample of the non-institutionalized adult population in Romania. The data were collected by in-personal interviews in the respondents home. The May 2001 survey contains 1816 individuals aged 18 or above. 10 Due to non-item responses, we finally use 1770 individuals in the analysis. The questionnaire includes questions on demographic characteristics, health, education, employment status and other socio-economic characteristics. The subjective well-being question was framed in terms of life satisfaction Generally, how satisfied are you with the way you live?. 11 This question was assessed using a four-point scale with the following alternatives: not 9 The measurement took place at different point in time ( ), which may partly explain some of the differences found. 10 In addition, the Open Society Foundation collected a sample of 286 young people aged years. However, in order to analyze a representative sample, we do not use this group in our analyses. 11 In Romanian, Cât de mulţumit sunteţi în general de felul în care trăiţi? 8

9 at all satisfied, quite unsatisfied, quite satisfied and very satisfied. 12 Moreover, specific life satisfaction questions related to specific domains of life such as housing, health, cleaning in the municipalities, money and job satisfaction were also asked and responses reported using the same 4-point scale as in the general life satisfaction question. Table 1 presents the distributions of the answers to the satisfaction questions. >>> Table 1 As shown in Frey and Stutzer (2002), supported by Table 4, Romania scores lower than the US and Western European countries on general life satisfaction question. 73% of the sample reports general life satisfaction to be unsatisfied. There are some differences between the answers to the domain specific satisfaction questions, but overall individuals do not seem to be unsatisfied to the same degree as with life in general, with exception for the monetary situation. 4 Econometric framework and results To address the question on what determines life satisfaction, we use an ordered probit regression model, since life satisfaction is measured on an ordinal scale. Basically, we follow the method presented in Blanchflower and Oswald (2002), which links ab economic model to econometric specification. The ordered probit model uses the maximum likelihood method to find the best set of regression coefficients to predict the self-reported values of life satisfaction to fall into the reported category rather than another, where classification is based on estimated cut-off points. The explanatory 12 In Romanian,.. 9

10 variables can broadly be separated into specific satisfaction variables, socio-economic and demographic variables. Respondents report on a four-point scale for each of the specific satisfaction variables and therefore we create 3 dummy variables for them, where the reference group is very satisfied. Job satisfaction needs a special categorization since not all people belong to the labour force. Base case is again very satisfied (with the job situation) and in order to disentangle those who currently do not work, we also create the following dummy variables: students, farmers, retired, and unemployed. Given that unemployment is a new feature in Romania it is of interest to study its impact on life satisfaction. Moreover, as discussed in Section 2, one way out of unemployment has been to take up the opportunity of farming, and thereby we may also expect negative impact from people belonging to this category on general self-reported life satisfaction. We use annual consumption expenditure per capita in the respondent s household, as a proxy for income, or more broadly standard of living (Deaton, 1997). This approach has several advantages: responses to questions regarding household expenditure are considered more reliable than direct questions concerning income, and consumption expenditures tend to be smoother across seasons than income, particularly since a proportion of respondents are farmers. The household expenditure per capita variable is grouped into five groups: 0-300,000 lei (ROL) per month, , ,000 ROL, 600,000-1,000,000 ROL, 1,000,000-1,500,000 ROL and above 1,500,000 ROL, where the highest group is used as reference group. The cut-off for poverty is defined as 60% of the average expenditure per person REF. Molnar and Panduru (2000) reported that in Romania, in 1998, the share of persons belonging to households whose income is under the poverty line established at 50% of the median of households distribution by 13 Exchange rate in May 2001 was ROL for USD 1 in the beginning of the month, and in the end of the month. 10

11 income per capita was 14.27%. At the 60% cut-off, the poverty rate accounted for 22.0%. Income is one of the variables that has been most substantially affected by the recession in the economy. Given the fact of an even income distribution certain level of income before 1990 and the high number of people under the poverty line, we would expect income to significantly affect life satisfaction. In our data set the average expenditure per capita corresponds to 1.07 million median? ROL and hence the poverty line is at 0.62 million ROL, which roughly equals the cut-off point between the second and third income group. Thus, this allows us to directly test for the effect of being above or below the poverty line on happiness. The third element of the post-1989 era in Romania is increased freedom. Adaptation to freedom is difficult to measure since this is partly dependent on the environment where you live. In order to incorporate a notion of this we included a variable on whether the respondent in general would trust other people, and we expect that people who trust others also have a higher degree of life satisfaction. This variable may also pick up local criminality. The other explanatory variables included are standard ones used in this type of analysis, and these are explained in Table 2 together with the descriptive statistics. >>> Table 2 The answer to the general life satisfaction question, which is the dependent variable in our regression model, is unevenly distributed. Moreover, given the few observations in the highest group, i.e. among those being very satisfied with their life (1.8%), we merged them with those stating quite satisfied. Thus, we analyse life satisfaction on a 3- point scale. Table 3 presents the results from the ordered probit regression, where the dependent variable is self-reported life satisfaction. Table 3 also reports the estimated 11

12 marginal effects calculated at the mean for each of the three different outcomes. A positive marginal effect for a given outcome indicates than an increase in the independent variable increases the probability that a respondent will belong to that specific category of life satisfaction and vice versa. >>> Table 3 Three variables of specific interest are, as discussed above, income, employment status and trust. As expected economic status measured by the household expenditures per capita is positively correlated with life satisfaction, which are inline with other studies (e.g. Frey and Stutzer, 2000, Gerdtham and Johannesson,1997, and Winkelmann and Winkelmann, 1998). Interestingly, the two lowest income groups reflect individuals, who are classified to belong to household under the poverty line according to Zamfir (1999), have a significantly lower life satisfaction. Moreover, the effect satisfaction of money also has a significant impact on life satisfaction, and a similarly strong effect on life satisfaction from satisfaction of own housing standard. In the analysis of the impact of occupation status, employed people who are very satisfied with their job situation is the base case. The only group, which is significant different form the base case, is the one containing unemployed people. The finding of the negative effect on life satisfaction from being unemployed is similar to findings in studies in Western Europe, where unemployment is not a new phenomenon (see e.g. Clark and Oswald, 1994, Oswald, 1997, and Winkelmann and Winkelmann, 1998). Individuals who trust other people report a significant higher life satisfaction. The number of residents in the place where respondents live has a negative impact on life satisfaction, but it is only 12

13 significant for those living on the countryside compared to others. However, if the respondents were born in the same area as they currently live, this increases the life satisfaction. Higher self-reported satisfaction with own health status has a positive and significant effect on life satisfaction as expected and in line with previous studies in other countries (e.g. Clark, 1994 and Gerdtham and Johannesson, 1997). The effect of marital status, i.e. being married or unmarried has a positive impact on life satisfaction compared to others, and gender, i.e. males report a lower life satisfaction, are similar to previous findings but not significant at conventional level (see e.g Gerlach and Stephan, 1996, Theodossiou, 1998, and Winkelmann and Winkelmann, 1998). There is a significant non-linear effect in age following a U-shape and it seems that people are unhappiest around the age of x, which also pretty much follows empirical findings elsewhere. The effect of education indicates that higher educated people are more satisfied with their life, and significantly higher if holding a university degree, which again is a confirmation of similarities to studies in Western European countries (e.g. Frey and Stutzer, 2000, and Gerdtham and Johannesson, 1997). Finally, there is a positive effect of better self-reported local environmental quality on life satisfaction. 5 Discussion and conclusions In this paper we have used data from the May 2001 s Public Opinion Barometer in Romania in order to analyse which factors that influence subjective well-being. The general distribution of life satisfaction is not skewed towards the upper part of the distribution as found in surveys in Western European countries and the US, rather 73% stated that they were not at all satisfied or quite unsatisfied with life. While the absolute 13

14 level of life satisfaction is lower, the results from the econometric analysis however are similar to those obtained when analysing data from Western European countries and the US in respect to relative impact of domain specific satisfaction and socio-economic characteristics on general life satisfaction. Well-being among the citizens in a country should be of main concern of the policymakers. By analyzing subjective well-being this may allow identification of areas where public policies could have a significant impact on individuals well-being. In our analysis we find that life dissatisfaction in Romania is mainly explained by dissatisfaction related to areas where policy makers actually could influence such as housing standard, health status, monetary situation, unemployment, and local environment quality. The post-revolution years in Romania did not result in the economic growth as expected, which possibly explains the low absolute level of life satisfaction. In the light of the poor performance of economic growth, it is not surprisingly that unemployment has increased and real income has decreased. The negative impact of these events on individuals life satisfaction are clearly demonstrated in the regression results, especially among individuals in household defined to be below the poverty line. The government has, however, taken action in order to reduce poverty by introducing redistribution schemes, where unemployment benefit is one important part. One reason for the strong effect of unemployment on life satisfaction may be that this is a new phenomena in post-revolution Romania. Another effect of the stagnation in the economy during the 1990 s is that the material standard, especially housing, has not been improved (UNECE, 2002). However, a bit surprisingly, still 20% of the respondents report to be very satisfied with their housing standard, but this could be a 14

15 combination of that some have benefited from improvements and the reference point of what is consider to be a good housing standard. The outstanding issue is, however, how changes in policies affect the subjective well-being and thus what areas should public policies really concentrate on. 15

16 References Blanchflower, David G. and Andrew J. Oswald (2000), Well-Being Over Time in Britain and the USA. NBER Working Paper No Cambridge, MA: National Bureau of Economic Research. Chen, S.-H, Datt, D. and Ravallion, R. (1995), Poverty Increasing in the Developing World?, Policy Research Department, The World Bank, Data Appendix, updated version, 40: Clark, Andrew E. (1997), Job Satisfaction and Gender: Why Are Women So Happy at Work? Labor Economics 4(4): Clark, Andrew E. and Andrew J. Oswald (1994), Unhappiness and Unemployment, Economic Journal 104(424): Clark, Andrew E. and Andrew J. Oswald (1996), Satisfaction and Comparison Income, Journal of Public Economics 61(3): Clark, A.E., Georgellis, Y. and Sanfrey, P. (2001), Scarring: The psychological impact of past unemployment, Economica, 68, pp Deaton, A, The analysis of household surveys: a microeconometric approach to development policy. Published for the World Bank by the John Hopkins University Press, Baltimore. Di Tella, Rafael, Robert J. MacCulloch and Andrew J. Oswald (2001), Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness. American Economic Review 91(1): Earle J., and Telegdy, Á. (2001), Privatization and Productivity in Romanian Industry: Evidence from a Comprehensive Enterprise Panel, IZA Discussion Paper No Easterlin R.A., (2000), The worldwide standard of living since 1800, The Journal of Economic Perspectives 14, Fassmann H., and. Münz, European East-West Migration , International Migration Review 28. Fassmann, H. & R. Münz, "European East-West Migration ", in: R. Cohen, The Cambridge Survey of World Migration, 1995: 473. Freedom House (2002) Annual Survey of Freedom Country Scores to , The Freedom House. Data retried from 16

17 Frey, Bruno S. and Alois Stutzer (2002), Happiness and Economics: How the Economy and Institutions Affect Human Well-Being, Princeton University Press. Gerdtham, Ulf-G and Magnus Johannesson, (2001), The relationship between happiness, health, and socio-economic factors: results based on Swedish microdata, Journal of Socio-Economics 30, Gerlach, K. and Stephan, G., (1996), A paper on unhappiness and unemployment in Germany, Economics Letters 52, Gwartney, J. and Lawson, R. with Samida, D,. (2000), Economic Freedom of the World: 2000 Annual Report, The Fraser Institute, Vancouver. Data retrieved from Inglehart, Ronald (1999), Trust, well-being and democracy, in Mark Warren (ed.) Democracy and Trust, New York and Cambridge: Cambridge Univ. Press, pp Kahneman, D., Diener E. and Schwarz N. (eds.), (1999), Foundations of hedonic psychology: Scientific perspectives on enjoyment and suffering, Russel Sage Foundation, New York. Maniu, M.T., E. Kallai and D. Popa (2001), GLOBAL RESEARCH PROJECT, Explaining Growth, Country Report: Romania ( ), Global Development Network, McCollum, James K. (1998), Is Communism Dead Forever?, University Press of America. Milanovic, Branko and Yvonne Ying (1996), Notes on income distribution in Eastern Europe, World Bank, Washington DC, mimeo Molnar, Maria and Filofteia Panduru (2000), Trends and indicators on child and family well-being in Romania, Background paper prepared for the Regional Monitoring Report No. 8: A Decade of Transition, UNICEF. Ng, Y.-K, (1997). A Case for Happiness, Cardinalism, and Interpersonal Comparability, Economic Journal, Pacepa, Ion Mihai (1987), Red Horizons: Chronicles of a Communist Spy Chief, Washington, D.C.: Regnery Gateway. Romanian National Institute of Statistics, Romanian Statistical Yearbook, various years, , and time series Theodossiou, I (1998). The effects of low-pay and unemployment on psychological well-being: a logistic regression approach, Journal of Health Economics 17,

18 Veenhoven, R., (1996), Happy life-expectancy. A new comprehensive measure of quality-of-life in nations, Social Indicators Research 39, Veenhoven, R., (2000), Freedom and Happiness: A Comparative Study in Forty-four Nations in the Early 1990s. In: Ed Diener and Eunkook M. Suh (eds). Culture and Subjective Well-Being. Cambridge, MA: MIT Press: Winkelmann, L. and Winkelmann, R., (1998). Why are the unemployed so unhappy? Evidence from panel data, Economica, 65, pp Zamfir C., and E., (1999). Politici sociale în România (Social policies in Romania), Editura Expert, Bucuresti. 18

19 Table 1. Responses to general and domain specific satisfaction questions How satisfied are you with the way you your your cleaning in your money? live? housing? health? your area? your job? Not at all satisfied Quite unsatisfied Quite satisfied Very satisfied Number of observations Note: Only people who work answer the job satisfaction question. 19

20 Table 2. Descriptive statistics Variables Mean Std.dev Male Marital status Married Unmarried Children (1=yes, 0=no) Age Educational groups High-school University Ortodox Romanian Employment status Unemployed Retired Student Housewife Farmer Trust people Income -groups 0-300,000 ROL , ,000 ROL ,000-1,000,000 ROL ,000,000-1,500,000 ROL Residence area groups City, above 200,000 inhabitants City, ,000 inhabitants Small town, ,000 inhabitants Very small town, under 30,000 inhabitants Big village If born in the residence area groups City, above 200,000 inhabitants City, ,000 inhabitants Small town, ,000 inhabitants Very small town, under 30,000 inhabitants Big village Village

21 Table 3. The determinants of life satisfaction and marginal effects (ME) All (ordered probit) ME Not at all satisfied ME Quite unsatisfied ME: Quite satisfied/ Very satisfied How satisfied are you with your house? (CG: very satisfied) Not at all satisfied *** *** * *** Quite unsatisfied *** *** *** Quite satisfied * * * How satisfied are you with your health? (CG: very satisfied) Not at all satisfied *** *** *** Quite unsatisfied * Quite satisfied How satisfied are you with cleaning serv.? (CG: v. satisfied) Not at all satisfied ** * ** Quite unsatisfied Quite satisfied How satisfied are you with your money? (CG: very satisfied) Not at all satisfied *** *** *** Quite unsatisfied *** ** ** *** Quite satisfied Income-groups (CG: more than 1,500,000) 0-300,000 ROL *** *** *** 300, ,000 ROL *** *** *** 600,001-1,000,000 ROL * ,000,001-1,500,000 ROL * ** * Trust people *** *** *** *** How satisfied are you with your job? Not at all satisfied Quite unsatisfied Quite satisfied Employment status (CG: employee or employer) Unemployed ** ** ** Retired Student Housewife Farmer Male Marital status Married * Unmarried Children (1=at least one) Age *** *** *** *** Age-squared *** *** *** *** Educational groups (CG: less than high school) High-school University *** *** ** *** Orthodox Romanian Residence area groups (CG: village) City, > 200,000 inhabitants *** *** *** City, , *** ** *** Small town, , *** ** *** Very small town, <30, ** * ** Big village *** *** *** If born in the residence area groups City, > 200,000 inhabitants City, , Small town, , Very small town, <30, * ** * Big village ** ** ** Village Cut_ Cut_