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Abstract:

cover
CEP Discussion Paper
Economic Growth Evens-Out Happiness: Evidence from Six Surveys
Andrew E. Clark, Sarah Flèche and Claudia Senik
October 2014
Paper No' CEPDP1306:
Full Paper (pdf)

JEL Classification: D31; D6; I3; O15


Tags: happiness; inequality; economic growth; development; easterlin paradox

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 argue that the extension of various public goods helps to explain this greater happiness homogeneity. This new stylised fact arguably comes as a bonus to the Easterlin paradox, offering a somewhat brighter perspective for developing countries.