Expanding Notions of Economic and Subjective Well-Being: A Case Study on Older and Non-Older Australians

While Australian studies have begun exploring the relationship between disposable income and global life satisfaction or happiness assessments, there is a lack of empirical investigation exploring the relationship between broader notions of economic well-being and subjective well-being. This paper addresses this gap by developing and comparing two alternative individual-based well-being frameworks. The first develops a more comprehensive measure of economic resources in line with the economic theory of consumption. A set of economic resource metrics is developed that append disposable income with income streams form non-cash services (including in-kind social transfers) and annuitised non-home wealth and home wealth, as providing the full range of potential consumption possibilities that affect an individual’s economic well-being. The second develops a domain-specific life-satisfaction well-being indicator framework based on psychological references to individual subjective well-being. The results are based on person-level data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. Empirical analysis involves comparing individual economic well-being to subjective well-being for older Australians (aged 65 years and over) and non-older Australians (aged 15 to 64 years), and also across the two age groups. In the context of an ageing population, these two cohorts face specific challenges. Macro-level challenges include the ability of government to mitigate declining labour force participation rates with increasing health, aged-care and pension-related fiscal pressures. Micro-level challenges include maintaining social cohesion across and within generations and the quality of life of individuals across the life-course. The four-way comparative analysis will provide insight into the nature of economic advantage and disadvantage within and across age cohorts, taking account of the role of wealth (particularly home wealth) and the provision of public benefits, to an individual's cognitive evaluation of their life.