Social Security and Life Satisfaction - Empirical Findings (Soziale Sicherheit Und Lebenszufriedenheit - Empirische Ergebnisse)

Abstract

Life satisfaction in Germany has decreased, contrary to the fact of increasing material prosperity. This paper provides evidence that publicly and privately provided social security has a positive impact on personal life satisfaction by estimating an Ordered Logit Model. The analysis is based on survey data of the Socio-Economic Panel (SOEP) for the period from 1991-2007 and for more than 40,000 respondents. The results offer practical benefits for economic policy, indicating a deterioration of perceived social security despite the fact that social benefits per inhabitant continued to rise. As a result of the globalization and the inequality of the personal income distribution, respondents express considerable concerns about job security and their personal economic situation. The decline of perceived social security can help to explain the constant decrease of life satisfaction, both of East- and West-German respondents.