Welfare State and Life Satisfaction: Evidence from Public Health Care

Abstract

We examine the link between the welfare state and citizens' subjective wellbeing by using evidence from public health care services. By combining local‐level data on public health care and individual‐level data on life satisfaction, we show that relatively high expenditures in health care have a positive effect on individuals' life satisfaction in our data. We find some evidence for an ‘ends‐against‐the‐middle’ equilibrium in provision of public health care, where middle‐income individuals prefer higher public expenditure than low‐income or high‐income individuals. Further, our results indicate that the welfare benefit of public provision depends on individual political orientation.