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The Easterlin paradox and the decline of social capital: An integrated explanation

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  • Pugno, Maurizio

Abstract

During the most recent decades people in the US have reported both a stagnant or even declining subjective well-being, as Easterlin (Easterlin, R.A., 1974. Does economic growth improve the human lot? Some empirical evidence. In: David, P.A., Melvin, W.R. (Eds.), Nations and Households in Economic Growth. Academic Press, New York, pp. 89-125) originally observed, and deterioration in their social and family ties, as Putnam (Putnam, R.D. (2000). Bowling Alone. Simon&Schuster, New York) has claimed. The paper proposes an integrated explanation of these two stylised facts by extending the analysis of the relative income explanation of the Easterlin paradox to social relationships as enjoyable ends of choice. Drawing on the evidence-based results of psychology, the paper constructs a model whose premises are (i) that individuals produce social relationships by means of relational ability, (ii) that this ability is primarily shaped during infancy, and (iii) that commercial pressure on children to consume in competition with others may displace the enjoyment of social relationships. The model is thus also able to explain the case of rich countries, like Sweden, that devote relatively more human and material resources than the US to children and adolescents, and that experience both increasing subjective well-being and improving social capital.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 38 (2009)
Issue (Month): 4 (August)
Pages: 590-600

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Handle: RePEc:eee:soceco:v:38:y:2009:i:4:p:590-600

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Web page: http://www.elsevier.com/locate/inca/620175

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Keywords: Easterlin paradox Social capital Relative income Well-being Happiness Relational goods Relational ability;

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References

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  1. Oswald, Andrew J & Powdthavee, Nattavudh, 2007. "Obesity, Unhappiness, and The Challenge of Affluence : Theory and Evidence," The Warwick Economics Research Paper Series (TWERPS) 793, University of Warwick, Department of Economics.
  2. Antoci, Angelo & Sacco, Pier Luigi & Vanin, Paolo, 2004. "Social capital accumulation and the evolution of social partecipation," AICCON Working Papers 5-2004, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
  3. Blanchflower, David G. & Oswald, Andrew J., 2007. "Hypertension and Happiness across Nations," The Warwick Economics Research Paper Series (TWERPS) 828, University of Warwick, Department of Economics.
  4. Flavio Cunha & James J. Heckman & Lance Lochner & Dimitriy V. Masterov, 2005. "Interpreting the Evidence on Life Cycle Skill Formation," NBER Working Papers 11331, National Bureau of Economic Research, Inc.
  5. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
  6. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
  7. John Helliwell, 2005. "Well-Being, Social Capital and Public Policy: What's New?," NBER Working Papers 11807, National Bureau of Economic Research, Inc.
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  12. Rafael Di Tella & Robert MacCulloch, 2005. "Gross National Happiness as an Answer to the Easterlin Paradox?," Macroeconomics 0504027, EconWPA.
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Citations

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Cited by:
  1. Vatter, Johannes, 2012. "Well-being in Germany: What explains the regional variation?," FZG Discussion Papers 50, Research Center for Generational Contracts (FZG), University of Freiburg.
  2. Johannes Vatter, 2012. "Well-Being in Germany: GDP and Unemployment Still Matter," Working Paper Series of the German Council for Social and Economic Data 196, German Council for Social and Economic Data (RatSWD).
  3. Fernandes, Liliana & Mendes, Américo & Teixeira, Aurora, 2013. "Assessing child well-being through a new multidimensional child-based weighting scheme index: An empirical estimation for Portugal," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 155-174.
  4. Marta Portela & Isabel Neira & Maria del Salinas-Jiménez, 2013. "Social Capital and Subjective Wellbeing in Europe: A New Approach on Social Capital," Social Indicators Research, Springer, vol. 114(2), pages 493-511, November.
  5. Lotito, Gianna & Migheli, Matteo & Ortona, Guido, 2011. "An experimental inquiry into the nature of relational goods," POLIS Working Papers 160, Institute of Public Policy and Public Choice - POLIS.
  6. Jacopo Baggio & Elissaios Papyrakis, 2014. "Agent-Based Simulations of Subjective Well-Being," Social Indicators Research, Springer, vol. 115(2), pages 623-635, January.
  7. Johannes Vatter, 2012. "Well-Being in Germany: What Explains the Regional Variation?," SOEPpapers on Multidisciplinary Panel Data Research 435, DIW Berlin, The German Socio-Economic Panel (SOEP).

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