Trade openness and individual happiness: who benefits the most?

Using data from the World Values Survey and European Values Survey from 1999 to 2021, covering 102 countries, this study examined how trade openness affects individual happiness and through what channels. The findings revealed that trade openness generally had a positive impact on individuals’ happiness, particularly through exports and goods trade, which significantly enhanced residents’ happiness in low- and middle-income countries (regions). This positive effect was primarily achieved through the economic growth generated by trade openness. These findings challenge the applicability of the Easterlin paradox and provide empirical support for the Stolper – Samuelson theorem. Additionally, trade openness exhibited a ‘cross-age’ effect on happiness, and its welfare benefits remained robust despite uncertainty shocks. Economic growth amplified the positive effect of trade openness, whereas inflation and unemployment weakened it. These findings suggest that policymakers in low- and middle-income countries should prioritize trade openness as a tool to improve residents’ happiness; however, countries facing high inflation, unemployment, and income inequality should proceed cautiously with trade openness.