Creative Destruction and Subjective Wellbeing
In this paper we analyze the relationship between turnover-driven growth and subjective wellbeing, using cross-sectional MSA level US data. We find that the effect of creative destruction on wellbeing is (i) unambiguously positive if we control for MSA-level unemployment, less so if we do not; (ii) more positive on future wellbeing than on current well-being; (iii) more positive in MSAs with faster growing industries or with industries that are less prone to outsourcing; (iv) more positive in MSAs within states with more generous unemployment insurance policies.
The authors are grateful to the Gallup Organization for permitting the use of the Gallup Healthways Wellbeing Index data. For very helpful comments and discussions, we thank Marios Angeletos, Roland Benabou, Anne Case, Henry Farber, Fabrice Murtin, Richard Rogerson, Francesco Trebbi, Fabrizio Zilibotti, and seminar or conference participants at Princeton, CIFAR, Columbia, Zurich, Harvard, the London School of Economics, the NBER Summer Institute Income Distribution & Macroeconomics group, the Firm and Technology Dynamics Conference at the University of Nottingham, the ASSA Meetings in Boston, and the IEA Annual Congress in Amman. Deaton acknowledges funding support from the Gallup Organization, with whom he is a consulting Senior Scientist, and from the National Institute of Aging through the NBER, grants numbers 5R01AG040629-02 and P01 AG05842-14, and through Princeton's Roybal Center for Translational Research on Aging, Grant P30 AG024928. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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. citation courtesy of