Klaipėdos universitetas

Income inequality has received widespread attention in the scientific literature. Income inequality has a significant impact on the health and education levels of the population, as well as increases social tension and crime rates, however there is less research on the impact of income inequality on people`s overall life satisfaction. In Lithuania and Latvia, income inequality expressed by the Gini index of disposable income is among the highest in the EU, whereas in Estonia, income inequality is slightly higher than the average in the EU. Similar results are also found for the Lithuania and Latvia regarding overall life satisfaction, which is among the lowest in the EU, while overall life satisfaction in Estonia is somewhat lower than the average in the EU. The aim of the research is to assess whether income inequality has a negative impact on people`s overall life satisfaction and to evaluate how fiscal policy has affected income inequality and overall life satisfaction in the Baltic States. The results of the research show that income inequality and life satisfaction are negatively correlated, and that fiscal policy has reduced income inequality in the Baltic States, expressed by the Gini index based on market income, on average by 30%.

The study presents alternative measures for measuring the welfare of a country in the context of identifying relationships generated by the impact of changes in the income level, measured by gross domestic product (GDP), related to other welfare, measured by the Happy Planet Index (HPI). The analysis was conducted in Romania, during the period from 2012 to 2016. The research methodology involves simple linear regression and welfare descriptive variables such as GDP, GDP/capita, HPI and its subcomponents’ indicators, namely life satisfaction, life expectancy and ecological footprint. Identification of aspects that have an impact on the welfare of citizens allows to compare levels of wellbeing experienced worldwide and to identify the main areas at the national level on which improvements can be made. The results indicate that, although there is no correlation between GDP and HPI, GDP/capita has great influence on both life satisfaction and life expectancy. Also, GDP has influence on the ecological footprint. Given these considerations, the main conclusion of the research is that, although the level of welfare, quantified using GDP, changes positively, this change is due to the increased life expectancy, life satisfaction, reduced ecological footprint rather than to changes in income levels.