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The Great Happiness Moderation

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  • Andrew E. Clark
  • Sarah Flèche
  • Claudia Senik

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.

Suggested Citation

  • Andrew E. Clark & Sarah Flèche & Claudia Senik, 2012. "The Great Happiness Moderation," SOEPpapers on Multidisciplinary Panel Data Research 468, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp468
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    References listed on IDEAS

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    Cited by:

    1. Edsel Beja, 2014. "Yet, Two More Revisions to the Human Development Index," Forum for Social Economics, Taylor & Francis Journals, vol. 43(1), pages 27-39, April.
    2. O'Donnell, Gus & Oswald, Andrew J., 2015. "National well-being policy and a weighted approach to human feelings," Ecological Economics, Elsevier, vol. 120(C), pages 59-70.
    3. Yang, Jidong & Liu, Kai & Zhang, Yiran, 2015. "Happiness Inequality in China," MPRA Paper 66623, University Library of Munich, Germany.
    4. Piekalkiewicz, Marcin, 2016. "Money, Social Capital and Materialism. Evidence from Happiness Data," MPRA Paper 70522, University Library of Munich, Germany.
    5. repec:dgr:rugsom:14014-eef is not listed on IDEAS
    6. Fabio Sabatini & Francesco Sarracino, 2017. "Online Networks and Subjective Well-Being," Kyklos, Wiley Blackwell, vol. 70(3), pages 456-480, August.
    7. Alina Botezat & Livia Baciu, 2014. "Well-Being Inequality And The Economic Crisis: Evidence From Life In Transition Surveys In Eastern Europe," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6(2), pages 22-31, July.
    8. repec:ntu:ntugeo:vol2-iss1-14-035 is not listed on IDEAS
    9. Paolo Li Donni & Juan Rodríguez & Pedro Rosa Dias, 2015. "Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 673-701, March.
    10. repec:eee:ecolet:v:163:y:2018:i:c:p:17-21 is not listed on IDEAS
    11. Raluca I. Iorgulescu, 2014. "Modelling in happiness economics," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 2(1), pages 35-41, June.
    12. Mikucka, Malgorzata & Sarracino, Francesco & Dubrow, Joshua K., 2017. "When Does Economic Growth Improve Life Satisfaction? Multilevel Analysis of the Roles of Social Trust and Income Inequality in 46 Countries, 1981–2012," World Development, Elsevier, vol. 93(C), pages 447-459.
    13. Mikucka, Malgorzata & Sarracino, Francesco, 2014. "Making economic growth and well-being compatible: the role of trust and income inequality," MPRA Paper 59695, University Library of Munich, Germany.
    14. Angelini, Viola & Bertoni, M & Corazzini, L., 2014. "Unpacking the determinants of life satisfaction," Research Report 14014-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    15. Peter Krause, 2015. "Quality of Life and Inequality," SOEPpapers on Multidisciplinary Panel Data Research 765, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    Keywords

    Happiness; inequality; economic growth; development; Easterlin paradox;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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