Economic Growth Evens Out Happiness: Evidence from Six Surveys
15 Pages Posted: 16 Aug 2016
Date Written: September 2016
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
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