Economic Growth Evens Out Happiness: Evidence from Six Surveys

15 Pages Posted: 16 Aug 2016

See all articles by Andrew Clark

Andrew Clark

Paris School of Economics (PSE); IZA Institute of Labor Economics

Sarah Flèche

London School of Economics & Political Science (LSE) - London School of Economics

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Date Written: September 2016

Abstract

In spite of the great U‐turn that saw income inequality rise in Western countries in the 1980s, happiness inequality has fallen in countries that have experienced income growth (but not in those that did not). Modern growth has reduced the share of both the “very unhappy” and the “perfectly happy.” Lower happiness inequality is found both between and within countries, and between and within individuals. Our cross‐country regression results suggest that the extension of various public goods helps to explain this greater happiness homogeneity. This new stylized fact arguably comes as a bonus to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.

Keywords: development, Easterlin paradox, economic growth, happiness, inequality

JEL Classification: D6, D31, I3, O15

Suggested Citation

Clark, Andrew Eric and Flèche, Sarah, Economic Growth Evens Out Happiness: Evidence from Six Surveys (September 2016). Review of Income and Wealth, Vol. 62, Issue 3, pp. 405-419, 2016. Available at SSRN: https://ssrn.com/abstract=2824055 or http://dx.doi.org/10.1111/roiw.12190

Andrew Eric Clark (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Sarah Flèche

London School of Economics & Political Science (LSE) - London School of Economics ( email )

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