April 9, 2014 in Business

Money can buy happiness, economist says

By The Spokesman-Review
 

It’s not just popular opinion: Rich people are happier than poor people.

Economist Justin Wolfers has spent the past several years examining studies that support that claim, plus dozens of other measures that try to explain why some groups of people are happier than others.

Wolfers, 41, is one of the Web’s best-known economists. Born in Australia, he’s now a U.S. citizen and has earned respect for his ability to summarize economic issues and relate them to everyday concerns.

Last fall when writing about the decline in the U.S. jobless rate, Wolfers looked at the drop in unemployment and concluded: “Jobs growth continues … but beneath the headline: blech!”

He’s currently an economics professor at the University of Michigan, and is a commentator for National Public Radio and a contributor to the blog Freakonomics. He is also a senior fellow with the Brookings Institution.

On Tuesday, Wolfers gave an hourlong presentation on the linkage between economics and happiness during Gonzaga University’s Economics Symposium in Spokane.

His quick overview from studying reams of data collected by phone and mail surveys covering 160 countries:

• Men in recent decades in America are happier than women. “No one knows exactly why,” Wolfers told the audience. It may be that women have internalized several measures of success, more than the basic “am I popular” focus young women faced growing up in the 1960s, he said.

• Young people are happier than middle-aged people, at least in most countries. The reason: Raising a family and going through career advancement make life harder, he said.

• Older people are generally happier than middle-aged people. That’s the flip side of the previous question; as people reach retirement they can start relaxing after raising children or concluding career goals.

• In general, not only are the rich happier than the poor, but globally, richer nations are happier than poorer ones, Wolfers noted.

At the same time, it takes more money to increase happiness the more one makes. That should suggest, he added, that a minimum-wage law would produce more happiness in any nation than trying to increase the wealth of the top 5 percent.

• People who are married are happier than those who aren’t. But there’s some uncertainty why, Wolfers said.

“It could be that people who are generally happy to start with are those who get married more often,” he said.

• Among Americans in the lowest 12 percent of income-earners, 21 percent said they were happy. Of those earning more than $150,000 per year (the top 10 percent), 53 percent said they were happy.

Flipping the question, among the lowest-earning 12 percent, 26 percent said they were unhappy in general, based on a set of factors such as enjoyment of meals, depression and feeling respected. Of the top 10 percent, only 2 percent reported feeling unhappy, he said.

Asked after the lecture why he pursues the dimensions of happiness, Wolfers said he has an inherent instinct to look at economic factors and try to find connections to real life.

“I love knowing every day that I’m going to do economics,” he said. “And economics can be part of the public policy debate. That’s why I became an economist. I don’t want to be grandiose, but we all want to make the world a better place,” he said.


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