THE ECONOMICS OF HAPPINESS: Life Domains, Comparisons and Migration

This dissertation places life satisfaction at the centre of its analysis—an enduring concern of human experience, and a concept that has recently gained prominence in economics and the social sciences. While individuals have always sought to understand what it means to live a good life, only in the last few decades have researchers begun to study life satisfaction systematically, treating it as a measurable, dynamic, and policy-relevant outcome. This thesis contributes to this growing field by approaching life satisfaction through three interrelated perspectives: individual, comparative, and relational. The first chapter examines life satisfaction from an individual standpoint, focusing on how satisfaction in specific life domains—such as income, health, family relationships, housing, and sleep—shapes overall well-being. The study finds that while different life domains contribute to overall life satisfaction in varying degrees depending on age, the relative ranking of these domains remains stable across the life course. In particular, health satisfaction and family relationships, consistently emerge as the strongest predictors of overall well-being, pointing to the influence of life course dynamics on subjective evaluations, while also revealing the enduring importance of certain core domains across all ages. The second chapter adopts a comparative perspective, investigating how international migrants assess their well-being through income comparisons with different reference groups: people in their country of origin, host-country natives, and co-ethnic peers. One of the most striking findings is that migrants do not appear to compare themselves positively with people in their country of origin. On the contrary, this reference group is associated with lower life satisfaction. Two possible explanations emerge: many migrants may distance themselves from their past context and focus instead on host-country standards; at the same time, strong expectations from family members left behind—especially around remittances—can turn the connection with the origin country into a source of pressure. The third chapter moves to a relational lens, analysing how international migration affects the well-being of those who remain in the country of origin. Focusing on Poland, the study reveals that the departure of a family member can have a positive effect on the life satisfaction of those left behind—an effect only partially explained by financial remittances. The findings offer a preliminary conceptualisation of a novel construct—happiness remittances: emotional benefits experienced by those left behind, arising from the perception that a loved one is thriving abroad. All three studies rely on fixed-effects models, which allow for robust identification by controlling for unobserved individual heterogeneity. This methodological consistency strengthens the internal validity of the findings and ensures comparability across studies. For this reason, the selection of high-quality, longitudinal data sources—such as the German Socio-Economic Panel (SOEP) and the Polish Social Diagnosis survey —has been essential to the empirical strategy of the thesis. Rather than treating life satisfaction as a stable or purely individual trait, this dissertation shows it to be a shifting outcome—sensitive to personal circumstances, shaped by social comparisons, and deeply rooted in family and emotional ties. In doing so, it offers new insights into how well-being is constructed, experienced, and transmitted across people’s lives and social environments.