Economic Hardship and Well-Being: Examining the Relative Role of Individual Resources and Welfare State Effort in Resilience Against Economic Hardship

With the aftermath of the economic crisis starting to fold out, the extent and the conditions under which the experience of economic hardship thwarts subjective well-being spark academic interest. In this paper, we examine the cushioning impact of three immaterial buffers embedded within civil society—namely social networks, religiosity, and confidence in politics—in combination with the cushioning role of the welfare state. Analyzing the 2010 wave of the European Social Survey, the results confirm that the experience of economic hardship is inversely related to happiness. All three proposed protective measures cushion the negative impact of economic strain on happiness, whereby the positive effect of social networks and confidence in politics is stronger in countries with lower levels of social expenditure. The latter finding provides some evidence for the crowding out-thesis but mainly suggests that a strong welfare state can take over the role of protective buffers in civil society, which is helpful as such buffers are less present among the most vulnerable social groups. The results of the analysis are discussed in relation to social science research and public policy.