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Creative Destruction and Subjective Well-Being

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  • Philippe Aghion

    (CIAR - Canadian Institute for Advanced Research - Université de Montréal, Department of Economics, Harvard University, NBER - National Bureau of Economic Research - National Bureau of Economic Research, CDF - Collège de France - CdF - Collège de France, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, LSE - London School of Economics and Political Science)

  • Ufuk Akcigit

    (Princeton University , University of Chicago)

  • Angus Deaton

    (Princeton University)

  • Alexandra Roulet

    (Department of Economics, Harvard University)

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

  • Philippe Aghion & Ufuk Akcigit & Angus Deaton & Alexandra Roulet, 2016. "Creative Destruction and Subjective Well-Being," Post-Print halshs-01496948, HAL.
  • Handle: RePEc:hal:journl:halshs-01496948
    DOI: 10.1257/aer.20150338
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01496948
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    References listed on IDEAS

    as
    1. Betsey Stevenson & Justin Wolfers, 2013. "Subjective Well-Being and Income: Is There Any Evidence of Satiation?," American Economic Review, American Economic Association, vol. 103(3), pages 598-604, May.
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    5. 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.
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    Cited by:

    1. Klaus Wälde, "undated". "Stress and Coping - An Economic Approach," Working Papers 1514, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    2. 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.
    3. 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.
    4. Michal Brzezinski, 2018. "Top incomes and subjective well-being," Working Papers 471, ECINEQ, Society for the Study of Economic Inequality.
    5. Michal Brzezinski, 2018. "Top incomes and subjective well-being," Working Papers 2018-15, Faculty of Economic Sciences, University of Warsaw.
    6. 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).
    7. 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 for the Study of Labor (IZA).
    8. Kamila Cygan-Rehm & Christoph Wunder, 2018. "Do Working Hours Affect Health? Evidence from Statutory Workweek Regulations in Germany," CESifo Working Paper Series 7098, CESifo Group Munich.
    9. 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.
    10. Odermatt, Reto & Stutzer, Alois, 2017. "Subjective Well-Being and Public Policy," IZA Discussion Papers 11102, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Well being;

    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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