Is Man A Social Animal?
Andrew E. Clark (Paris School of
Economics and IZA)
http://www.pse.ens.fr/clark/
CAGE Centre for Competitive Advantage in the Global Economy
Modern Society and the Economics of Happiness
Wednesday 5th October, 5.30pm – 7.00pm
40000
3
FIGURE 1: Happiness and Real Income Per Capita in the US, 1973-2004
2.5
Average Happiness
30000
2
20000
1.5
1
Happiness
Real Income Per Capita
10000
0.5
0
0
1973
1977
1981
1985
1989
Year
1993
1998
2003
Real Income Per Capita (2000 US$)
Dick Easterlin, in a paper written 40 years ago, underlined what
looked to be a problem: growing GDP per capita did not go
hand-in-hand with growing happiness.
He not only set out the problem, he also proposed
solutions, based on income comparisons.
I compare my income to that of others.
I compare my income now to what I used to
receive in the past.
In both cases, rising income for everyone will not
lead to greater happiness (at least not in the
long run).
There has been a huge amount of work suggesting
that this is true.
There has been a huge amount of work suggesting
that this is true.
And I believe it.
There has been a huge amount of work suggesting
that this is true.
And I believe it.
Which begs the question:
“If income doesn’t make us happier over time,
then what does?”
Quite a bit of my research over the past 10 years
has been on this topic.
Let me give you a brief flavour of some of it with
respect to some of the big issues that we
arguably face as a modern society.
First: unemployment
UK UNEMPLOYMENT ROSE BY 80,000 IN THE THREE MONTHS TO JULY THIS YEAR TO 2.51 MILLION, ACCORDING TO
THE OFFICE FOR NATIONAL STATISTICS (ONS). THAT IS IS THE LARGEST INCREASE IN NEARLY TWO YEARS.
Is that bad? Yes it is!
Unemployment is hugely important for individual well-being
ECHP: Satisfaction Scale 1-6. 500 000 individuals.
ECHP: Labour Force Status and
Life Satisfaction
4.5
4
3.5
Life
Satisfaction
3
2.5
2
Self-Employed
Employed
Unemployed
Labour Force Status
But do you adapt to it, and is it relative?
NLF
There are comparison effects with respect to
unemployment
Unemployment hurts less the more of it there is
around (the psychological cost of
unemployment is lower in high-unemployment
regions)
This effect is far stronger for men, especially
prime-age men (16-50), than for women.
Social Comparisons with respect to Unemployment?
EA95
3
NW96
EM91
2
GHQDifference
RS91 EA9
E2
M96
SW92
EM93WAY
9H
393
WM95
491
NW
95
RS95 SW
S9
W
SW
93
EA94 WA96
GL91
RS96
RS93
W
Y9
H
7A9W
RS
29
W
7A95WA
9M
191NW94
EA91
YH92
SC
9
2
NW97 RS94
SC9
N
W
91
EM95YH96
S1
C
94
GL96
EA97
NT96
NT91
NW93
SC96
YH94 WM9
2
SC97
GL92
SW96
WM93
GL95
G
L
9
7
EM97
M
YE
H
99
52
SW
C9
N
93
2
A
WM97
SE
C
99
53
SW97
NT92
SW95
EM94
RS97
1
W
N2
T97
YH9
1A9
GL93
GL94
0
EA96
WM96
WA94WM94
NT93
NT95
NT94
-1
5
10
Regional Unemployment Rate
15
The well-being gap between employees and the unemployed is
smaller in regions with greater unemployment.
Unemployment also hurts less when I share it with other
household members.
Consider a household with two adults who are active in
the labour market (i.e. employed or unemployed).
1) Best situation (for my well-being): I work and my
partner works (E-E)
Unemployment also hurts less when I share it with other
household members.
Consider a household with two adults who are active in
the labour market (i.e. employed or unemployed).
1) Best situation (for my well-being): I work and my
partner works (E-E)
2) Less good: I work and my partner is unemployed (E-U)
Unemployment also hurts less when I share it with other
household members.
Consider a household with two adults who are active in
the labour market (i.e. employed or unemployed).
1) Best situation (for my well-being): I work and my
partner works (E-E)
2) Less good: I work and my partner is unemployed (E-U)
3) And the worst? It’s not U-U, but rather U-E…
It should however be underlined that these comparisons
effects are arguably marginal.
Comparisons might make unemployment a little less bad,
but it remains bad even so.
For most people, unemployment is a deeply depressing
experience, and should continue to attract policy
attention.
There is equally only little adaptation to unemployment
Unemployment starts bad, and stays bad
Second subject: Marriage and Divorce
It looks like we get used to marriage
And we equally get used to divorce
Actually, if anything divorce is a good idea, in that both sexes seem to
end up happier after it (divorce is rational).
This only applies to ending unhappy marriages: if you’re happily
married, then stay put!
And we can’t even count on our children
There are also potential social comparisons in the effect of
divorce:
Is divorce easier to live with in a high-divorce area
• For adults?
• For the children?
Third topic: Obesity
Obesity: the UK is a top-ten country
ADULT OBESE POPULATION
Nauru 78.5%
Tonga 56.0%
Saudi Arabia 35.6%
United Arab Emirates 33.7%
United States 32.2%
Bahrain 28.9%
Kuwait 28.8%
Seychelles 25.1%
United Kingdom 24.2%
DIABETES IN ADULTS
Nauru 30.7%
United Arab Emirates 19.5%
Saudi Arabia 16.7%
Bahrain 15.2%
Kuwait 14.4%
Oman 13.1%
Tonga 12.9%
Mauritius 11.1%
Egypt 11.0%
Greater BMI is associated with lower well-being, at least
past some critical level
We estimated this critical level to be around 23 for
women, and 25 for men: very close to the WHOmandated “normal” BMI of 25.
On average:
• Own obesity reduces well-being
• Partner’s obesity reduces well-being
• But two partners who are both obese are just as happy
as two partners who are not obese
Last topic: Religion
Unemployment starts bad, and stays bad
Religion is less important for the younger
Percentage of respondents within age
category (%)
8.1. How important is religion in your daily life?
50
40
Importance
level
Very
Somewhat
Not very
Not at all
30
20
10
0
18-24 25-34 35-44 45-54 55-64 65-97
Age category
Total
If the unemployed are happier living with other
unemployed,
and the employed are happier living with other
employed….
Then the religious should be happier living in religious
areas,
and atheists should be happier living with other atheists.
Right?
Wrong.
Recent work on European Social Survey Data shows
that:
1) The religious are happier when they live in religious
regions
2) But so are atheists
The religious “spillovers” are then mostly positive.
Everyone likes living with the religious.