Digitalization and subjective wellbeing in Europe

Abstract

Purpose This study aims to analyze the effect of digitalization on 28 European countries’ subjective wellbeing by using macro (aggregate level) indicators. Design/methodology/approach The research investigates the impact of digitalization (Digital Economy and Society Index [DESI]) on life satisfaction through its components. The study uses several models based on the two-stage least squares method. Findings The findings show that internet connectivity, use of the internet and integrated digital technology are positively related to life satisfaction. Furthermore, the results revealed that human capital and digital public services are negatively associated with it. The study also suggested that digital skills, e-health, and e-government services do not necessarily increase an individual’s life satisfaction level. The internet’s use appeared to be the most effective digitalization component in affecting life satisfaction in Europe. Research limitations/implications The study is based on the DESI index from 2014 to 2019. Although it does not influence the outcome, future research may consider additional indexes such as Digital Adoption Index and Digital Transformation Index and extend the study period. Practical implications The study helps the policymakers directing their attention to the importance of digitalization on life satisfaction. Originality/value This work extends the limited understanding of subjective wellbeing, digitalization and the digital economy and society index in terms of theoretical implications.