Paul Frijters

Paul Frijters
The University of Queensland | UQ · School of Economics

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179
Publications
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Publications

Publications (179)
Article
There is great interest in understanding who in the population is resilient in the face of major life events, and who is not. In this paper we construct a revealed measure of adulthood psychological resilience by modelling individuals’ responses to ten adverse life events using a dynamic finite mixture regression model applied to 17 years of panel...
Book
Around the world, governments are starting to directly measure the subjective wellbeing of their citizens and to use it for policy evaluation and appraisal. What would happen if a country were to move from using GDP to using subjective wellbeing as the primary metric for measuring economic and societal progress? Would policy priorities change? Woul...
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The current practise of cost-benefit analysis in Western countries consists of a collection of various incompatible ideas and methodologies to obtain replicable numbers for the costs and benefits of major public spending plans. This paper describes the main elements of the dominant methodology, which combines consumer and producer surplus, price-ta...
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We use a natural field experiment to estimate the causal effect of race on discretionary favours in the marketplace. Test customers are randomly assigned to board public buses with no money to purchase a fare, leaving the bus driver to voluntarily decide whether to offer them a free ride. Based on 1,552 transactions, we uncover strong evidence of r...
Article
A happy choice: a response to the responses - PAUL FRIJTERS, ANDREW E. CLARK, CHRISTIAN KREKEL, RICHARD LAYARD
Article
In this article, we lay out the basic case for wellbeing as the goal of government. We briefly review the history of this idea, which goes back to the ancient Greeks and was the acknowledged ideal of the Enlightenment. We then discuss possible measures on which a wellbeing orientation could be based, emphasizing the importance of acknowledging the...
Chapter
Richard Easterlin’s lifetime happiness theory holds that people get less happy over the life-cycle as exaggerated expectations hit; this has been found to be true for the 20–50 age range in many Western countries. This paper looks at the implications for child happiness and asks: when does the ‘disappointment with reality’ start to bite in early li...
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The current peer review system suffers from two key problems: promotion of an in-crowd whose methods, opinions and innovations it protects; and failure to represent the opinions and interests of non-peer clients. As a result, whole disciplines orient themselves toward navel-gazing research questions of little import to society or even science as a...
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We use the 2015–16 waves of the UK Household Longitudinal Study (Understanding Society) to look at subjective wellbeing around the time of the June 2016 EU membership Referendum in the UK (Brexit). We employ measures of both evaluative and affective wellbeing, namely life satisfaction and mental distress, respectively. We find that those reporting...
Article
We examine the nature of stated subjective probabilities in a complex, evolving context in which participants are not told what the actual probability is: we collect information on subjective expectations in a computerized car race game wherein participants must bet on a particular car but cannot influence the odds of winning once the race begins....
Article
This paper examines the welfare loss caused by import restrictions on bananas in Australia, which we argue to be a classic rent‐seeking policy. We propose a new micro‐model of agricultural production under uncertainty and production delays and ask whether, due to cyclones and the timing of planting decisions, Australian banana import restrictions h...
Chapter
Cooperation within larger groups is often endangered by incentives to free ride. One goal of market and institutional design is to create environments in which socially efficient cooperation can be achieved. The main point in this chapter is that only considering first-order incentives to cooperate within a larger group may not be sufficient, as su...
Article
In this paper, we compare participants in an artefactual field experiment in urban China with the survey population of migrants from which they were recruited. The experimental participants were more educated, more likely to lend money to friends, and worked fewer hours than the general population. They differ significantly from non-participants in...
Article
Is the rise in inequality in Australia due to global changes in the distribution of marginal productivity or changes in the allocation of political favours? This article lays out the arguments for both views. Looking at the tax and subsidy changes that favour the rich, and considering that almost all the 200 richest Australians look like the benefi...
Article
We estimate the effect of stock market fluctuations on subjective wellbeing and mental health using Australian survey data over the period 2001-2012, which includes the Global Financial Crisis. A particular innovation of the paper is the use of a variety of satisfaction measures - overall, financial, employment - and the use of a stylised lifecycle...
Article
We present a simple model of status-seeking over multiple socioeconomic domains by introducing the concept of conspicuous health as an argument in the utility function, in addition to the well-established conspicuous consumption term. We explore the implications of such a utility function for optimal non-linear taxation, where an increase in concer...
Article
Agents form expectations about the future in many markets, and these expectations drive investment and consumption behavior, inform entry and exit choices, and can even provide direct satisfaction or distress. How agents form expectations is therefore of central interest to economists. This paper reviews three competing theories and then provides e...
Article
To what extent does poor mental health affect employment outcomes? Answering this question involves multiple technical difficulties: two-way causality between health and work, unobservable confounding factors and measurement error in survey measures of mental health. We attempt to overcome these difficulties by combining 10 waves of high-quality pa...
Article
We investigate the extent to which childhood characteristics are predictive of adult life satisfaction using data from two British cohort studies. In total, variables observed up to age 16 predict around 7% of the variation in average adult life satisfaction. Adding contemporaneous adulthood variables increases the predictive power to 15.6%, while...
Article
The literature has shown strong associations between health, financial and social life events and mental health. However, no studies as yet have looked at the temporal nature of the effects of life events on stated mental health nor have they included the effects of the events befalling partners within a household. This paper looks at the spillover...
Article
This work considers whether planning matters with respect to the effect of a new sibling on another siblings' health. Objective health outcomes are observed before and after a new addition to the family. To date, the literature on family size has focused on a quality-quantity trade-off; the more children in a family, the less resources devoted to e...
Article
There is considerable policy interest in the impact of macroeconomic conditions on health-related behaviours and outcomes. This paper sheds new light on this issue by exploring the relationship between macroeconomic conditions and an indicator of problem drinking derived from state-level data on alcoholism-related Google searches conducted in the U...
Article
We employ a natural field experiment to study the extent and nature of racial discrimination in Queensland, Australia. Mimicking the historical case of Rosa Parks who was denied seating in a bus because she was black, an important moment for the U.S. civil rights movement, we sent trained testers who differed in ethnic appearance to bus stops askin...
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Full-text available
This paper addresses an important policy question: who gets the largest utility gain from income and does the tax system adequately reflect this? We address this question by using Australian panel data and taking life satisfaction as a proxy for utility, allowing us to identify the marginal utility of additional income for different groups of indiv...
Article
We quantify the impact of offshoring and other globalisation measures on individual perceptions of job security. For the analysis we combine industry-level offshoring measures with micro-level data from a large German household panel survey and estimate ordinal fixed effects models. Our results indicate that offshoring to low-wage countries signifi...
Article
Sacrifices to deities occur in nearly all known religions. In this paper, we report on our attempts to elicit this type of religious behaviour towards Theoi in the laboratory. The theory we test is that, when faced with uncertainty, individuals attempt to engage in a reciprocal contract with the source of uncertainty by sacrificing towards it. In o...
Article
In this paper, we present and test the empirical implications of competing theories about how expectations of outcomes affect utility. In the first utility formulation, which is consistent with particular interpretations of disappointment, prospect theory and regret theory, individuals receive negative utility from outcomes that were worse than exp...
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Full-text available
Australian happiness levels are known to decline between the age of 15 and 23 by almost 0.7 on a ten-point scale. To find out what happens before that age, we develop child-specific scales to measure the effect of personality and life satisfaction domains on childhood happiness. With an internet-based survey, we collect unique data from 9 to 14 yea...
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In this paper we compare three theories of utility formation: prospect theory, regret theory, and a combination which additionally allows for direct utility flows from positive expectations. We then test which of these theories best explains actual connections between health and welfare over time, using a rich Australian data set on health expectat...
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We use a unique data of representative migrants and urban local workers in 15 Chinese cities to investigate entrepreneurship and credit constraints under labour market discrimination. We divide self employed into prefer to be self-employed and prefer to have a salaried job but cannot find one; and divide salaried workers into want-to-be entrepreneu...
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In this paper we address the question of how much of adult life satisfaction is predicted by childhood traits, parental characteristics and family socioeconomic status. Given the current focus of many national governments on measuring population well-being, and renewed focus on effective policy interventions to aid disadvantaged children, we study...
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We study social preferences in the form of altruism using data on 959 interactions between random commuters at selected traffic intersections in the city of Brisbane, Australia. By observing real decisions of individual commuters on whether to stop (give way) for others, wefind evidence of (i) gender discrimination by both men and women, with women...
Article
We introduce a duration model that allows for unobserved cumulative individual-specific shocks, which are likely to be important in explaining variations in duration outcomes, such as length of life and time spent unemployed. The model is also a useful tool in situations where researchers observe a great deal of information about individuals when f...
Article
Using life satisfaction responses from Australian panel data we examine the questions of when and to what extent individuals are affected by major positive and negative life events, including changes in financial situation, marital status, death of a close relative, and being the victim of crime. The key advantage of our data is that we are able to...
Article
We propose a simple short-cut to the problem of estimating endogenous peer effects from observed behavior: asking students about peers' ability and their own effort. Our survey evidence indicates that students believe in own-peer complementarities in educational production.
Article
In this paper we argue that network collapse is a key feature of economic downturns. In a model where individual …rms produce more if they have a larger network, but where they have to break up with existing links within their network in order to upgrade technologically, we …nd endogenous network cycles. We argue that network collapse is likely to...
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In this paper we report on the trade-offs that 1,068 Australian university students make between absolute income and the rank of that income in hypothetical income distributions. We find that income rank matters independently of absolute income, with greater weight given to rank by males, migrants, and individuals from wealthy families. Rank-sensit...
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Do parents invest more or less in their high ability children? We provide new evidence on this question by comparing observed ability differences and observed investment differences between siblings in the NLSY. To overcome endogeneity issues we use sibling differences in handedness as an instrument for cognitive ability differences, since handedne...
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A large body of empirical research links mental health and labour market outcomes; however, there are few studies that effectively control for the two-way causality between work and health and the existence of unobserved individual characteristics that might jointly determine health and labour market outcomes. In this study, we estimate the effect...
Article
Abstract Using German panel data, we investigate how well individuals predict their own future life satisfaction. The context is the decade following the 1990 reunification of Germany, which provided a large shock to the future prospects of the inhabitants of the former East Germany. We find that the majority of East Germans significantly overestim...
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Full-text available
We estimate the effect of early child development on maternal labor force participation. Mothers of poorly developing children may remain at home to care for their children. Alternatively, mothers may enter the labor force to pay for additional educational and health resources. Which action dominates is the empirical question we answer in this pape...
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We review and model the impact of the internet on the production and uptake of highquality news. Our review of trends in the market for news suggests 3 stylized facts: i) particular quality news markets are dominated by merely a few providers, ii) demand for quality news appears stable, but provision of news has become specialized; mainstream news...
Article
Many empirical studies are ambiguous about whether good formal institutions are conducive to subjective well-being or not. Possibly, this ambiguity is caused by cross-section models that do not account for unobserved cultural and institutional effects. Using the World Value Survey 1980-2005, this paper supports a positive relation in a country pane...
Article
This paper examines the effect of female human capital endowment on the groom price or dowry by using a newly available data set that was created by surveying the middle-class residents of Patna, Bihar. The estimates based on the OLS and 2SLS suggest the existence of positive association between the two variables for the sample under study. The res...
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Using longitudinal income-tax registers, we study how past labour market outcomes affect current labour market transition rates. We focus on hysteresis effects of the durations and incidence of previous spells out of work. We estimate flexible multi-state Mixed Proportional Hazard specifications for transition rates between employment, unemployment...
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A recent debate in the medical literature has arisen around the mortality effects of obesity. Whereas it has been argued that the obese die younger, the data that have become available do not immediately support this. This potentially undermines the hypothesis that modern life with its physical ease and cheap food would eventually make us die young...
Article
Survey-based health research is in a boom phase following an increased amount of health spending in OECD countries and the interest in ageing. A general characteristic of survey-based health research is its diversity. Different studies are based on different health questions in different datasets; they use different statistical techniques; they dif...
Article
This paper inserts Veblen's [Veblen, T., 1898, The Theory of the Leisure Class. The Viking Press, New York] concepts of conspicuous leisure and conspicuous consumption into a very simple model. Individuals have the choice to either invest their time into working, leading to easily observable levels of consumption, or into conspicuous leisure, whose...
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Full-text available
We estimate the e®ect of early child development on maternal labor force participation using data from teacher assessments. Mothers might react to having a poorly developing child by dropping out of the formal labor force in order to spend more time with their child, or they could potentially increase their labor supply to be able to provide the fu...
Article
The paper is concerned with the effect of international outsourcing on job loss fears. We combine industry-level outsourcing measures with micro-level data from a large German household panel survey and estimate ordinal fixed-effects models to account for individual unobserved heterogeneity and the ordinal nature of reported job loss fears. Aggrega...
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Full-text available
The well-known Easterlin paradox points out that average happiness has remained constant over time despite sharp rises in GNP per head. At the same time, a micro literature has typically found positive correlations between individual income and individual measures of subjective well-being. This paper suggests that these two findings are consistent...
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Full-text available
This paper argues that preconditions for welfare benefit entitlements based on labour market prospects can be counterproductive when they create an incentive for individuals to abstain from any investment earlier in life that could improve future prospects. Benefit entitlements based partly on investments made prior to labour market entry are then...
Article
Existing research applying the Personal Wellbeing Index (PWI) in China is restricted to urban and rural samples. There are no studies for Chinese off-farm migrants. The specific aims of this study are (a) ascertain whether Chinese off-farm are satisfied with their lives; (b) investigate the equivalence of the PWI in terms of its psychometric proper...
Article
China is not merely growing at double the rate of the European countries during the Industrial Revolution, it is also urbanising at double the speed. Using a unique dataset of rural-to-urban migrants in 15 major Chinese cities, we give preliminary answers to some of the most pressing policy questions: how many migrants are there and what are their...
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Full-text available
In this paper, we review some well-known philosophical problems with the use of happiness as the maximand of social policy, as well as, the practical problems one faces if one were to take happiness seriously as a policy maker. We illustrate the mainstream solutions to these problems by means of an application to the value-of-life.
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Full-text available
This paper argues that preconditions for welfare benefit entitlements based on labour market prospects can be counterproductive when they create an incentive for individuals to abstain from any investment earlier in life that could improve future prospects. Benefit entitlements based partly on investments made prior to labour market entry are then...
Article
Full-text available
Many empirical studies are ambiguous about whether good formal institutions are conducive to subjective well-being or not. Possibly, this ambiguity is caused by cross-section models that do not account for unobserved cultural and institutional effects. Using the World Value Survey 1980-2005, this paper supports a positive relation in a country pane...
Article
We study the importance of childhood socioeconomic conditions in predicting differences in life expectancy using data from a large sample of children collected in 16 locations in England and Scotland in 1937-39, who have been traced through official death records up to 2005. We estimate a number of duration of life models that control for unobserve...
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Full-text available
A growing literature seeks to explain differences in individuals' self-reported satisfaction with their jobs. The evidence so far has mainly been based on cross-sectional data and when panel data have been used, individual unobserved heterogeneity has been modelled as an ordered probit model with random effects. This article makes use of longitudin...
Article
In this paper, we provide a detailed investigation into the quitting behaviour of nurses in the British National Health Service (NHS), using a recently constructed longitudinal survey. We fit both single and competing risks duration models that enable us to establish the characteristics of those nurses who leave the public sector, distinguish the i...
Article
Russians reported large changes in their life satisfaction over the post-transition years. In this paper, we explore the factors that drove these changes, focusing on exogenous income changes, using panel data from the Russian Longitudinal Monitoring Survey over the period 1995 to 2001 and implementing a recently developed ordinal fixed-effects est...
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Full-text available
We study all-pay auctions with budget-constrained bidders who have access to fair insurance before bidding simultaneously over a prize. We characterize a unique equilibrium for the special cases of two bidders and one prize, show existence and a heuristic for finding an equilibrium in the case of multiple bidders and multiple prizes. We end with an...
Article
Starting a firm with expansive potential is an option for educated and high-skilled workers. If there are labor market frictions, this additional option can be seen as reducing the chances of ending up in a low-wage job and hence as increasing the incentives for education. In a matching model, we show that reducing the start-up costs for new firms...
Article
Passive smoking is a major public health issue. This paper documents the main risk factors that determine children's exposure to passive smoke, and then uses econometric techniques to provide a new economic quantification of the impact of this exposure on child health. Such information is valuable to policy-makers when deciding upon the amount of r...
Article
The twenty-five years after WW 2 witnessed strong labour market institutions and beneficial labour market outcomes - high wage growth and integration of low-skilled immigrants. Then came the macro shocks of the mid 1970s. Labour market outcomes deteriorated as full-time employment population ratios fell, particularly among males; unemployment and w...