The working class left behind? The class gap in life satisfaction in Germany and Switzerland over the last decades

Abstract:

The 1990s and 2000s were a gloomy period for Germany’s working class, hit by mass unemployment, welfare retrenchment and wage stagnation. We examine whether the growing economic disparity between the top and the bottom of Germany’s class structure was accompanied by a widening class gap in life satisfaction.

We analyse whether there is a social class gradient in life satisfaction and whether, over the last decades, this class gradient increased in Germany, relative to the comparison case of Switzerland. We use panel data for Germany (1984–2014) and Switzerland (2000–2015) and check the robustness of our results by replicating our analysis with the pooled German and Swiss samples of the European Social Survey (2002–2014).

In both countries, respondents in higher classes report substantially higher life satisfaction than those in lower classes. The class gap is twice as large in Germany than in Switzerland. In Germany, the class gap in life satisfaction narrowed between 1984 and 1990, strongly widened between 1990 and 2005 and then decreased again after 2010. In Switzerland, the class gap did not follow a clear time trend, but remained basically constant. In Germany, differences in unemployment risks and household income account for half of the class gap and its evolution over time.