Richard A. Easterlin, “Happiness and Economic Growth: The Evidence.” USC Dornsife Institute for New Economic Thinking, Working Paper No. 14-03, November 6, 2014.
• This paper covers much of the same ground as Easterlin (2013) – and hence this outline bears a close resemblance to the outline for the previous Easterlin article, too.
• According to the time-series data, rate of improvement in Subjective Well-Being (SWB) does not seem to depend on GDP growth, in: (1) developed countries; (2) developing countries; or (3) transition countries. Doubling the rate of GDP growth does not seem to change the growth of life satisfaction.
• In cross-country studies at a point in time, SWB growth is positively correlated with GDP growth. Combined with the lack of connection in the time-series evidence, we have the Easterlin paradox.
• For Latin American countries, even increases in financial satisfaction do not seem to rise with economic growth.
• In recent decades, China has seen unparalleled economic growth – but there is no evidence that Chinese people have gotten happier; perhaps the opposite, in fact.
• In the short run, there is a positive connection between SWB and economic growth – but there is no long-run connection. Economic growth does not buy happiness.
• Sacks, Stevenson, and Wolfers (2012) choose their time periods in ways that drive their results: they capture the short-term connection between SWB growth and GDP growth, but miss the long-term independence. Using the maximum time periods for which data are available restores the Easterlin effect.