Steady growth generates higher levels of wellbeing among citizens than ‘boom and bust’ cycles

What effect do recessions and economic expansions have on the mental wellbeing of citizens? Jan­-Emmanuel De Neve and colleagues present findings from a study of positive and negative fluctuations in business cycles across the world. They write that while growth is significantly associated with increased wellbeing, individuals do not benefit from economic expansions nearly as much as they suffer from recessions. This suggests that steady positive growth that minimises the risk of contraction is the most likely route to improving general wellbeing

Consumer Demand for Prize-Linked Savings: A Preliminary Analysis

This paper reports on a small-scale survey of the potential American demand for prize-linked savings accounts, an account that awards prizes as part of the saving product’s return. In October 2006, Centra Credit Union launched a prize-linked savings pilot. As part of that initiative, we conducted a mall intercept survey of over 500 people in Clarksville, Indiana, the community where the program was launched. This preliminary data suggests that low-to-moderate income Americans may have substantial demand for prize-linked savings, with a majority of survey participants expressing an interest in opening a prize-linked savings account. As predicted by theory and international experience, interest in prize-linked savings is greatest among people who do not have regular saving habits, who have little actual savings, who play lotteries extensively, and who are optimistic about their futures.

Happiness at work

Happiness is typically defined by how people experience and evaluate their lives as a whole. Since the majority of people spend much of their lives at work, it is critically important to gain a solid understanding of the role that employment and the workplace play in shaping happiness for individuals and communities around the world. In this paper, we focus largely on the role of work and employment in shaping people’s happiness, and investigate how employment status, job type, and workplace characteristics relate to measures of subjective wellbein

Wellbeing: science and policy

What produces a happy society and a happy life? Thanks to the new science of wellbeing, we can now answer this question using state-of-the-art empirical evidence. This transforms our ability to base our decisions on the outcomes that matter most, namely the wellbeing of us all including future generations. Written by two of the world's leading experts on the economics of wellbeing, this book shows how wellbeing can be measured, what causes it and how it can be improved. Its findings are profoundly relevant to all social sciences, including psychology, economics, politics, behavioural science and sociology. A field-defining text on a new science that aims to span the whole of human life, this will be an invaluable resource for undergraduate and graduate students, policy-makers and employers, who can apply its insights in their professional and private lives

Essays in political economy and voting behaviour

This thesis explores how political preferences are shaped by institutions, economic conditions, and personality. Each chapter is a distinct contribution and provides a different perspective on the formation of political preferences and, ultimately, voting behaviour. These different approaches relate to the fields of comparative political economy, behavioural economics, and political psychology. Methodologically, this thesis is empirically applied and the results of these separate enquiries into political preferences are grounded in statistical analysis. A first substantive chapter introduces a median voter data set that provides insight into the ideological position of the electoral centre in over 50 democracies. A second chapter uses this new data and studies cross-national voting behaviour in 18 Western democracies over 1960-2003. It is found that electoral behaviour is closely related to the salience of the following economic institutions: labour organization, skill specificity, and public sector employment. This research shows that political preferences are endogenous to economic institutions and implies the existence of institutional advantages to partisan politics. A third substantive chapter focuses on ideological change in the United States and tests the proposition that voters advance a more liberal agenda in prosperous times and shift towards being more conservative in dire economic times. A reference-dependent utility model relates income growth to political preferences by way of the demand for public goods and the optimal tax rate. This work thus links voting behaviour to economic business cycles and shows that ideological change is endogenous to income growth rates. Finally, a fourth chapter presents the largest study to date of the influence of the big five personality traits on political ideology. In line with prior research in political psychology, it is found that openness to experience strongly predicts liberal ideology and that conscientiousness strongly predicts conservative ideology. A variety of childhood experiences are also studied that may have a differential effect on political ideology based on an individual's personality profile. The findings of this final chapter provide new evidence for the idea that differences in political preferences are deeply intertwined with variation in the nature and nurture of individual personalities. Generally, this thesis provides some new insights into the complex world of political preference formation and does so by exploring the influential role of institutions, economic conditions, and personality

The motivational cost of inequality: pay gaps reduce the willingness to pursue rewards

Factors beyond a person’s control, such as demographic characteristics at birth, often influence the availability of rewards an individual can expect for their efforts. We know surprisingly little how such pay-gaps due to random differences in opportunities impact human motivation. To test this we designed a study in which we arbitrarly varied the reward offered to each participant in a group for performing the same task. Participants then had to decide whether or not they were willing to exert effort to receive their reward. Unfairness reduced participants’ motivation to pursue rewards even when their relative position in the distribution was high, despite the decision being of no benefit to others and reducing reward for oneself. This relationship was partially mediated by participants’ feelings. In particular, large disparity was associated with greater unhappiness, which was associated with lower willingness to work – even when controlling for absolute reward and its relative value, both of which also affected decisions to pursue rewards. Our findings suggest pay-gaps can trigger psychological dynamics that hurt productivity and well-being of all involved

Does employee happiness have an impact on productivity?

This article provides quasi-experimental evidence on the relationship between employee happiness and productivity in the field. We study the universe of call center sales workers at British Telecom (BT), one of the United Kingdom's largest private employers. We measure their happiness over a 6 month period using a novel weekly survey instrument, and link these reports with highly detailed administrative data on workplace behaviors and various measures of employee performance. Exploiting exogenous variation in employee happiness arising from weather shocks local to each of the 11 call centers, we document a strong causal effect of worker happiness on sales. This is driven by employees working more effectively on the intensive margin by making more calls per hour, adhering more closely to their workflow schedule, and converting more calls into sales when they are happier. In our restrictive setting, we find no effects on the extensive margin of happiness on various measures of high-frequency labor supply such as attendance and break-takin

Top incomes and human well-being around the world

The share of income held by the top 1 percent in many countries around the world has been rising persistently over the last 30 years. But we continue to know little about how the rising top income shares affect human well-being. This study combines the latest data to examine the relationship between top income share and different dimensions of subjective well-being. We find top income shares to be significantly correlated with lower life evaluation and higher levels of negative emotional well-being, but not positive emotional well-being. The results are robust to household income, individual’s socio-economic status, and macroeconomic environment controls

Genes, Economics, and Happiness

We explore the influence of genetic variation on subjective well-being by employing a twin design and genetic association study. In a nationally-representative twin sample, we first show that about 33% of the variation in life satisfaction is explained by genetic variation. Although previous studies have shown that baseline happiness is significantly heritable, little research has considered molecular genetic associations with subjective well-being. We study the relationship between a functional polymorphism on the serotonin transporter gene (5-HTTLPR) and life satisfaction. We initially find that individuals with the longer, transcriptionally more efficient variant of this genotype report greater life satisfaction (n=2,545, p=0.012). However, our replication attempts on independent samples produce mixed results indicating that more work needs to be done to better understand the relationship between this genotype and subjective well-being. This work has implications for how economists think about the determinants of utility, and the extent to which exogenous shocks might affect individual well-being.life satisfaction, twin study, genetic association, serotonin transporter gene, 5-HTTLPR, rs2020933