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The Great Happiness Moderation

Listed author(s):
  • Andrew E. Clark

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)

  • Sarah Flèche

    (Centre for Economic Performance - LSE - London School of Economics and Political Science)

  • Claudia Senik

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics, UP4 - Université Paris-Sorbonne)

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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Paper provided by HAL in its series Post-Print with number halshs-01109064.

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Date of creation: Nov 2014
Publication status: Published in Andrew E. Clark; Claudia Senik. Happiness and Economic Growth Lessons from Developing Countries, Oxford University Press, pp.32-139, 2014
Handle: RePEc:hal:journl:halshs-01109064
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01109064
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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