Equal before luck? Well-being consequences of personal deprivation and transition

Abstract

Past trauma resulting from personal life shocks, especially during periods of particular volatility such as regime transition (or regime change), can give rise to significant long-lasting effects on people’s health and well-being. We study this question by drawing on longitudinal and retrospective data to examine the effect of past exposure to major individual-level shocks (specifically hunger, persecution, dispossession, and exceptional stress) on current measures of an individual’s health and mental well-being. We examine the effect of the timing of the personal shocks, alongside the additional effect of ‘institutional uncertainty’ resulting from regime change in post-communist European countries. Our findings are as follows. First, we document evidence of the detrimental effects of shocks on a series of relevant health and well-being outcomes. Second, we show evidence of more pronounced detrimental consequences of such personal shocks experienced by individuals living in formerly communist countries (which accrue to about 8% and 10% in the case of persecution and hunger, respectively) than in non-communist countries. The effects are robust and take place in addition to the direct effects of regime change and exposure to personal shocks.