From market needs to human needs: Spain and the economic crisis

The 2008 financial crisis hit the world’s economies in different ways. In Spain, the economic crisis has had an acute effect on unemployment and access to health care and education, aggravated by the austerity plans of the Spanish government. In order to cope with the crisis, government efforts have aimed to control public deficit and stabilize financial markets, rather than directly support citizens’ wellbeing. In this context, the paper uses a subjective wellbeing (SWB) approach to study the relationship between the socioeconomic aspects most influenced by the crisis and the wellbeing of Spaniards. In order to do so, we use representative data from households in Granada in 2012. The city has one of the highest unemployment rates in the country, which has more than doubled since the beginning of the crisis. Regression analysis using three different SWB indicators as dependent variables reveals that unemployment and higher education are strong determinants of SWB, particularly regarding the perceived satisfaction of material needs. In this context of crisis, income has a weak and non robust relationship with SWB, except in the case of satisfying material needs. In the light of the empirical results, we propose that in order to maintain quality of life in Spain, policy interventions should focus more on social policies, such as reducing unemployment and keeping people in education, than on meeting the requirements of the financial markets.