Time, income and subjective well-being - Interdependent multidimensional polarization: 20 Years in Germany

Society drifts apart in many dimensions. Economists focus on income of the poor and rich and the distribution of income, however a broader spectrum of dimensions is required to draw the picture of multiple facets of individual life. In our study of multidimensional polarization we extend the income dimension by time, a pre-requisite and fundamental resource of any individual activity. We consider genuine personal leisure time as a pronounced source of social participation in the sense of social inclusion/exclusion and Amartya Sen's capability approach. With an interdependence approach to multidimensional (IMD) polarization compensation between time and income, parameters of a CES-type subjective well-being function, is evaluated empirically by the German population and based on German Socio-Economic Panel (GSOEP) and detailed time use diary data from the three German Time Use Surveys (GTUS) 1991/92, 2001/02 and the actual 2012/13. The focus is on the working poor and rich self-employed and employees. The background of IMD polarization incidence (risk) and intensity (magnitude) is estimated by a two-stage selectivity controlling approach. Main result: Time, additional to income, is a significant subjective well-being and polarization dimension. Its interdependence/compensation is of economic and statistical significance. Over 20 years IMD Polarization-incidence (risk) is about 20% (self-employed getting poorer compared to employees). Polarization-intensity (magnitude), however, increased significantly by 22% (stronger polarization of the self-employed), a distinct polarization drift to the tail ends of the distribution of time and income.