Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox

Justin Wolfers and Betsey Stevenson

No 6944, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The "Easterlin paradox" suggests that there is no link between a society?s economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

Keywords: Easterlin paradox; Economic growth; Happiness; Hedonic treadmill; Life satisfaction; Quality of life; Subjective well-being; Well-being-income gradient (search for similar items in EconPapers)
JEL-codes: D6 I3 J1 (search for similar items in EconPapers)
Date: 2008-08
New Economics Papers: this item is included in nep-hap
References: Add references at CitEc
Citations: View citations in EconPapers (666)

Downloads: (external link)
https://cepr.org/publications/DP6944 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox (2008)
Working Paper: Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox (2008)
Working Paper: Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox (2008)
Working Paper: Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6944

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6944

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().