Does joining the European Union increase the happiness level in nations?

Abstract

This paper aims to empirically test whether joining the European Union has increased the happiness level in nations. 12 European countries are analyzed over the time-period 1998-2017, and data is obtained from the World Database of Happiness, and the World Bank Group. The effect is measured by estimating a direct effect of joining the EU on the happiness in nations, and by estimating an indirect effect through the macroeconomic variables income, unemployment, and inflation. The main results are that over the period before the global financial crisis (1998-2007) a statistically significant positive direct relation is found between joining the EU and happiness, while the coefficient becomes insignificant when looking at the entire sample period (1998-2017). Moreover, over the period before the crisis, joining the EU had a significant indirect effect on happiness, through its significant direct positive effects on GDP per capita, and on the inflation rate, while these effects became insignificant when looking at the entire sample period. Finally, this paper empirically confirms the positive direct relation between income and happiness, and the negative direct relation between unemployment and happiness, and inflation and happiness.