Happiness and Growth the World Over: Time Series Evidence on the Happiness-Income Paradox

Abstract

There is no significant relationship between the improvement in happiness and the long term rate of growth of GDP per capita. This is true for three groups of countries analyzed separately - 17 developed, 9 developing, and 11 transition - and also for the 37 countries taken together. Time series studies reporting a positive relationship confuse a short-term positive association between the growth of happiness and income, arising from fluctuations in macroeconomic conditions, with the long-term relationship, which is nil.

Keywords: happiness, economic growth, developing countries, transition countries, developed countries

JEL Classification: I31, D60, O10, P27