Happiness and Economic Growth: The Evidence

Glatzer, W., Camfield, L., Møller, V., Rojas, M. (eds.), Global Handbook of Quality of Life, 2015, Springer, Forthcoming

USC-INET Research Paper No. 14-03

31 Pages Posted: 14 Nov 2014

See all articles by Richard A. Easterlin

Richard A. Easterlin

University of Southern California - Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 6, 2014

Abstract

Long term trends in happiness and income are not related; short term fluctuations in happiness and income are positively associated. Evidence for this is found in time series data for developed countries, transition countries, and less developed countries, whether analyzed separately or pooled. Skeptics, who claim that the long term time series trend relationship is positive, are mistaking the short term association for the long term one, or are misguided by a statistical artifact. Some analysts assert that in less developed countries happiness and economic growth are positively related “up to some point,” beyond which the association tends to become nil, but time series data do not support this view. The most striking contradiction is China where, despite a fourfold multiplication in two decades in real GDP per capita from a low initial level, life satisfaction has not improved.

Keywords: Happiness, life satisfaction, subjective well-being, income, long term, short term, Easterlin paradox, developed countries, transition countries, less developed countries, China

JEL Classification: I31, D60, O10, O5

Suggested Citation

Easterlin, Richard A., Happiness and Economic Growth: The Evidence (November 6, 2014). Glatzer, W., Camfield, L., Møller, V., Rojas, M. (eds.), Global Handbook of Quality of Life, 2015, Springer, Forthcoming; USC-INET Research Paper No. 14-03. Available at SSRN: https://ssrn.com/abstract=2522476

Richard A. Easterlin (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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