Is inequality in subjective well-being meritocratic? Danish evidence from linked survey and administrative data.?

This paper decomposes inequality in subjective well-being into inequality due to socioeco-nomic background (SEB) and meritocratic inequality due to differences in individual mer-its such as school performance. We measure the meritocratic share of well-being, defined as the share of explained variation in life satisfaction attributable to variation in merits not related to SEB. The empirical evidence from Denmark combines survey information on well-being with administrative data on individual characteristics. We find systematic differences in well-being already in early adulthood, where differences in economic out-comes are not yet visible. At age 18-19, about 40 percent of the inequality in well-being is meritocratic. The role of merits rises to 65-85 percent in midlife (age 40-55), where it is also higher than the role of merits in income inequality. The positive conclusions that in-equality in well-being is more meritocratic than income inequality and more meritocratic as people grow older get support by corresponding results using an equal opportunity ap-proach.

Automated summary

This paper decomposes inequality in subjective well-being into inequality due to socioeconomic background and meritocratic inequality due to differences in individual merits. The study measures the meritocratic share of well-being and finds that there are already systematic differences in well-being among young adults. As people grow older, the role of merits in well-being inequality increases and exceeds the role of merits in income inequality.