Regional Differences in Subjective Well-Being: Does Social Policy Offset the Effects of Inequality in Russia?

Abstract

Among the goals of social policy there is a specific one that welfare states are particularly interested in. This goal refers to a decrease in inequality levels, and consequently, an increase in subjective well-being. But does a successful social policy in fact offset the effects of inequality on subjective well-being? This question has long been an important feature of the research agenda but few give a straight answer to it. This work tests a hypothesis assuming that in regions with relatively low levels of average household  income and high levels of inequality social policy can reduce negative effects of inequality by redistributing large budget shares between health care, education and social programs. Two sources of empirical data were used in the study: (1) results of a survey conducted in 34 Russian regions representing the population of these regions, (2) objective indicators measuring the extent of social policy tools used in the regions under consideration. To evaluate whether regional social policy is capable of compensating for inequality effects the authors test Bayesian hierarchical models with uninformative and informative prior distributions. The authors conclude that expanding the scope of social policy tools in health care can compensate for the negative effects of the perceived inequality on subjective well-being.

Acknowledgments. The study is financed by Russian Science Foundation, grant no. 18­18­00341 “Transformation of values and subjective quality of life: a regional perspective”.