Migrants’ pursuit of happiness: An analysis of the effects of adaptation, social comparison and economic integration on subjective well-being on the basis of German panel data for 1990–2014

Abstract

German reunification provides a unique opportunity to investigate the effects of migration on subjective well-being (SWB) on the basis of longitudinal pre- and post-migration data. Our main goal is to assess the effects of adaptation, social comparison and economic integration on the change in SWB associated with migration from eastern to western Germany after the German reunification of 1990. We expect that gains or losses in SWB after migration are influenced by how migrants adapt to their new economic conditions, with whom they compare themselves and how well they integrate economically (as indicated by their relative income position) into the new society. We estimate fixed-effects generalized least squares regressions using Socio-Economic Panel data for the period 1990-2014. The results indicate a positive and strong effect of migration on SWB, both for men and women, which results in part from the higher incomes migrants earn in the new society. In line with the Easterlin paradox, our results show that general income increases do not generate equivalent gains in SWB because of processes of adaptation and social comparison. For migrating men the increase in SWB is diminished significantly by a dissatisfaction resulting from comparing their income with that of their new peers in western Germany and that of their former peers in eastern Germany. The change in SWB of migrating women and men is much more dependent on social comparison than on economic integration.