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Creative destruction and subjective well-being

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  • Aghion, Philippe
  • Akcigit, Ufuk
  • Deaton, Angus
  • Roulet, Alexandra

Abstract

In this paper we analyze the relationship between turnover-driven growth and subjective well-being. Our model of innovation-led growth and unemployment predicts that: (i) the effect of creative destruction on expected individual welfare should be unambiguously positive if we control for unemployment, less so if we do not; (ii) job creation has a positive and job destruction has a negative impact on well-being; (iii) job destruction has a less negative impact in areas with more generous unemployment insurance policies; and (iv) job creation has a more positive effect on individuals that are more forward-looking. The empirical analysis using cross sectional MSA (metropolitan statistical area)-level and individual-level data provide empirical support to these predictions.

Suggested Citation

  • Aghion, Philippe & Akcigit, Ufuk & Deaton, Angus & Roulet, Alexandra, 2016. "Creative destruction and subjective well-being," LSE Research Online Documents on Economics 69228, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:69228
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    1. Creative destruction and subjective well-being
      by maximorossi in NEP-LTV blog on 2017-03-31 18:09:25

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    1. Philippe Aghion & Ufuk Akcigit & Angus Deaton & Alexandra Roulet, 2016. "Creative Destruction and Subjective Well-Being," American Economic Review, American Economic Association, vol. 106(12), pages 3869-3897, December.
    2. Gaurav Khanna & Carlos Medina & Anant Nyshadham & Christian Posso & Jorge Tamayo, 2021. "Job Loss, Credit, and Crime in Colombia," American Economic Review: Insights, American Economic Association, vol. 3(1), pages 97-114, March.
    3. Jiequn Liu & Francis Munier, 2019. "Innovation and Entrepreneurs’ Subjective Well-being The mediation effect of job satisfaction and satisfaction with work-life balance," Working Papers of BETA 2019-42, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Cygan-Rehm, Kamila & Wunder, Christoph, 2018. "Do working hours affect health? Evidence from statutory workweek regulations in Germany," Labour Economics, Elsevier, vol. 53(C), pages 162-171.
    5. Klaus Wälde, 2015. "Stress and Coping - An Economic Approach," Jena Economic Research Papers 2015-020, Friedrich-Schiller-University Jena.
    6. Dolan, Paul & Kavetsos, Georgios & Krekel, Christian & Mavridis, Dimitris & Metcalfe, Robert & Senik, Claudia & Szymanski, Stefan & Ziebarth, Nicolas R., 2019. "Quantifying the intangible impact of the Olympics using subjective well-being data," Journal of Public Economics, Elsevier, vol. 177(C), pages 1-1.
    7. Daniel J. Lewis & Christos Makridis & Karel Mertens, 2019. "Do Monetary Policy Announcements Shift Household Expectations?," Working Papers 1906, Federal Reserve Bank of Dallas, revised 17 Jan 2020.
    8. Bellet, Clément S. & De Neve, Jan-Emmanuel & Ward, George, 2019. "Does Employee Happiness Have an Impact on Productivity?," CEPREMAP Working Papers (Docweb) 1905, CEPREMAP.
    9. Cygan-Rehm, Kamila & Kühnle, Daniel & Oberfichtner, Michael, 2017. "Bounding the Causal Effect of Unemployment on Mental Health: Nonparametric Evidence from Four Countries," IZA Discussion Papers 10652, Institute of Labor Economics (IZA).
    10. Keum, Daniel & Meier, Stephan, 2020. "License to Fire? Unemployment Insurance and the Moral Cost of Layoffs," IZA Discussion Papers 13497, Institute of Labor Economics (IZA).
    11. Ufuk Akcigit & Stefanie Stantcheva, 2020. "Taxation and Innovation: What Do We Know?," NBER Chapters, in: Innovation and Public Policy, National Bureau of Economic Research, Inc.
    12. Brzezinski, Michal, 2019. "Top incomes and subjective well-being," Journal of Economic Psychology, Elsevier, vol. 73(C), pages 60-65.
    13. Odermatt, Reto & Stutzer, Alois, 2017. "Subjective Well-Being and Public Policy," IZA Discussion Papers 11102, Institute of Labor Economics (IZA).
    14. Guo-Hua Cao & Jing Zhang, 2021. "Is a sustainable loop of economy and entrepreneurial ecosystem possible? a structural perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(5), pages 7002-7040, May.
    15. Klaus Wälde, 2018. "Stress and Coping - An Economic Approach," CESifo Working Paper Series 6966, CESifo.
    16. Henrik Schwabe & Fulvio Castellacci, 2020. "Automation, workers’ skills and job satisfaction," PLOS ONE, Public Library of Science, vol. 15(11), pages 1-26, November.
    17. C. O. Henriques & L. A. Lopez-Agudo & O. D. Marcenaro-Gutierrez & M. Luque, 2021. "Reaching Compromises in Workers’ Life Satisfaction: A Multiobjective Interval Programming Approach," Journal of Happiness Studies, Springer, vol. 22(1), pages 207-239, January.
    18. Fornaro, Paolo, 2018. "Economic Dynamics and Changes in Values and Attitudes among Finnish Regions: A Descriptive Analysis," ETLA Reports 82, The Research Institute of the Finnish Economy.
    19. Sumin Hu & Shulin Liu & Die Li & Yuxuan Lin, 2019. "How Does Regional Innovation Capacity Affect the Green Growth Performance? Empirical Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 11(18), pages 1-21, September.
    20. Kamila Cygam-Rehm & Christoph Wunder, 2018. "Do Working Hours Affect Health? Evidence from Statutory Workweek Regulations in Germany," SOEPpapers on Multidisciplinary Panel Data Research 967, DIW Berlin, The German Socio-Economic Panel (SOEP).
    21. Kamila Cygan-Rehm & Christoph Wunder, 2018. "Do Working Hours Affect Health? Evidence from Statutory Workweek Regulations in Germany," CESifo Working Paper Series 7098, CESifo.
    22. Paravee Maneejuk & Woraphon Yamaka, 2021. "The Impact of Higher Education on Economic Growth in ASEAN-5 Countries," Sustainability, MDPI, Open Access Journal, vol. 13(2), pages 1-28, January.
    23. Koen Decancq & Alexander Michiels, 2016. "Measuring Successful Aging with Respect For What Matters To Older Persons," Working Papers 1604, Herman Deleeck Centre for Social Policy, University of Antwerp.

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    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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