Subjective Well-Being, Income, Economic Development and Growth

Daniel Sacks, Betsey Stevenson and Justin Wolfers

No 5230, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We explore the relationships between subjective well-being and income, as seen across individuals within a given country, between countries in a given year, and as a country grows through time. We show that richer individuals in a given country are more satisfied with their lives than are poorer individuals, and establish that this relationship is similar in most countries around the world. Turning to the relationship between countries, we show that average life satisfaction is higher in countries with greater GDP per capita. The magnitude of the satisfaction-income gradient is roughly the same whether we compare individuals or countries, suggesting that absolute income plays an important role in influencing well-being. Finally, studying changes in satisfaction over time, we find that as countries experience economic growth, their citizens' life satisfaction typically grows, and that those countries experiencing more rapid economic growth also tend to experience more rapid growth in life satisfaction. These results together suggest that measured subjective well-being grows hand in hand with material living standards.

Keywords: Easterlin Paradox; development; economic growth; quality of life; life satisfaction; subjective well-being; well-being-income gradient; hedonic treadmill (search for similar items in EconPapers)
JEL-codes: I31 I32 O11 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2010-10
New Economics Papers: this item is included in nep-hap
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (116)

Published - published in: The World Bank (ed.). Development Challenges in a Post-Crisis World, 2012

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Related works:
Working Paper: Subjective Well-Being, Income, Economic Development and Growth (2010)
Working Paper: Subjective Well-Being, Income, Economic Development and Growth (2010)
Working Paper: Subjective well-being, income, economic development and growth (2010)
Working Paper: Subjective Well-Being, Income, Economic Development and Growth (2010)
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