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The Great Happiness Moderation

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  • Clark, Andrew E.

    ()
    (Paris School of Economics)

  • Flèche, Sarah

    ()
    (Paris School of Economics)

  • Senik, Claudia

    ()
    (Paris School of Economics)

Abstract

This paper shows that within-country happiness inequality has fallen in the majority of countries that have experienced positive income growth over the last forty years, in particular in developed countries. This new stylized fact comes as an addition to the Easterlin paradox, which states that the time trend in average happiness is flat during episodes of long-run income growth. This mean-preserving declining spread in happiness comes about via falls in both the share of individuals who declare low and high levels of happiness. Rising income inequality moderates the fall in happiness inequality, and may even reverse it after some point, for example in the US starting in the 1990s. Hence, if raising the income of all does not raise the happiness of all, it will at least harmonize the happiness of all, providing that income inequality does not grow too much. Behind the veil of ignorance, lower happiness inequality would certainly be considered as attractive by risk-averse individuals.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6761.

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Length: 53 pages
Date of creation: Jul 2012
Date of revision:
Publication status: forthcoming in: Andrew Clark and Claudia Senik (eds.), Happiness and Economic Growth: Lessons from Developing Countries. Oxford: Oxford University Press, 2014
Handle: RePEc:iza:izadps:dp6761

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Keywords: Easterlin paradox; happiness; inequality; economic growth; development;

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The Great Happiness Moderation
    by maximorossi in NEP-LTV blog on 2012-10-01 14:00:38
  2. On happiness inequality
    by chris dillow in Stumbling and Mumbling on 2012-07-02 13:33:03
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