The Effects of Income Transparency on Well-Being: Evidence from a Natural Experiment

S-Tier
Journal: American Economic Review
Year: 2020
Volume: 110
Issue: 4
Pages: 1019-54

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In 2001, Norwegian tax records became easily accessible online, allowing everyone in the country to observe the incomes of everyone else. According to the income comparisons model, this change in transparency can widen the gap in well-being between richer and poorer individuals. Using survey data from 1985–2013 and multiple identification strategies, we show that the higher transparency increased the gap in happiness between richer and poorer individuals by 29 percent, and it increased the life satisfaction gap by 21 percent. We provide back-of-the-envelope estimates of the importance of income comparisons, and discuss implications for the ongoing debate on transparency policies.

Technical Details

RePEc Handle
repec:aea:aecrev:v:110:y:2020:i:4:p:1019-54
Journal Field
General
Author Count
1
Added to Database
2026-01-29