NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox

Betsey Stevenson, Justin Wolfers

NBER Working Paper No. 14282
Issued in August 2008
NBER Program(s):   EFG   LS   ME

The "Easterlin paradox" suggests that there is no link between a society's economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

download in pdf format
   (4888 K)

email paper

This paper is available as PDF (4888 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14282

Published: Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102. citation courtesy of

Users who downloaded this paper also downloaded these:
Stevenson and Wolfers w18992 Subjective Well-Being and Income: Is There Any Evidence of Satiation?
Deaton Income, Aging, Health and Well-Being around the World: Evidence from the Gallup World Poll
Deaton w13317 Income, Aging, Health and Wellbeing Around the World: Evidence from the Gallup World Poll
Helliwell and Barrington-Leigh w15887 Measuring and Understanding Subjective Well-Being
Blanchflower and Oswald w7487 Well-Being Over Time in Britain and the USA
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us