Determinants of Happiness in Japan and the Netherlands: Macro and Micro Analysis and Comparison

Abstract

It is often said that the Japanese happiness is lower than that of Europeans. However, sufficient discussion has yet to take place with consideration of differences in social forms as a background factor. In this study, therefore, by leveraging comparative international surveys, we empirically study and compare the factors that affect happiness in Japan and in the Netherlands, a country which has a higher happiness level than other European countries, from both macro (country level) and micro (individual level) perspectives.This paper focuses on life evaluation as happiness. It was confirmed through the results of our macro analysis that social support (i.e., having relatives or friends you can count on to help you when you are in trouble) is the factor that significantly improves the level of life evaluation both in Japan and the Netherlands compared to other countries. In addition, change of the logarithmic value of GDP per capita in Japan is negative and statistically significant, which coincides with the Easterlin Paradox claim that more income does not bring greater happiness. On the other hand, we were unable to confirm the Easterlin Paradox in the Netherlands, in which change of the logarithmic value of GDP per capita is positive, though not statistically significant. Furthermore, our longitudinal data analysis in this paper also revealed that healthy life expectancy and generosity are insignificant, although their significance has been claimed in earlier studies (e.g. Helliwell et al, 2017).Although our macro analysis found social support is important both for Japanese and Dutch happiness on average, the results of our micro analysis have revealed different views and structure of society; the Netherlands is a welfare society in which the public sector and the citizens support each other, and Japan is a welfare society which is based on support provided by community including families and the local area. In other words, the Netherlands showed greater trust on others in general (general trust) than Japan, and Japan showed greater trust on families (family trust) than the Netherlands, a factor that had an influence on happiness levels of individuals in the respective countries. That is, while the Netherlands’ vision of a welfare society is based on “individuals and the public,” under which the independent citizens take the initiative in supporting each other, Japan’s vision of welfare society is based on “community,” under which families have a duty to support each other. In Japan, where freedom of choice is more limited than in the Netherlands, people who have more freedom of choice were found to be happier.In order to improve happiness in both countries, we need to strengthen social support based on their respectively unique visions of welfare society rather than resorting to income-boosting economic policies. In doing so, the key for Japan would be whether or not the system can be reformed in such a way as to allow freedom of choice to individuals.