Interesting Facts from Happiness Research – Part One: Income, Growth and Work

As there are many U.S. readers around, in addition to German happiness distribution, here the picture for the U.S. (click to enlarge)

Today, some more scientific facts on happiness:

Here  is a very good introduction to this field of research for those of you who want to know more detail:

The World Happiness Report

(all quotes below are from this study)

Let’s start with the most central argument for the downshifter-community:

Money / Materialism

…or more specifically: More money does not necessarily mean more happiness.

First takeaway:

Do not care too much about money.

Quote from the link above:

Many studies have shown that other things equal, people who care more about money are less happy.An important study covers a group of students who were freshmen in 1976. Soon after entering college they were asked “the importance to you personally of being well off financially.”

Nineteen years later they reported their income and their overall satisfaction with life, as well as with family life, friendships, and work. At a given level of income, people who cared more about their income were less happy with life overall, with their family life, with their friendships and with their job.

This is a good example. To be fair, the study also mentions that the people caring much about money made more of it and thus compensated a bit of the happiness losses due to their materialistic fixation.

However: Best case would be to show some ambition in your early life, but then, as soon as you reach an “OK” level of income, stop your ambitions in terms of income, and redirect them to maximize free time, social life, health, family and community work – all of them being very potent and stable happiness providers (and helpful for others on top!).

Another anecdotal evidence in favor for “money is not anything”, is this study, showing the percentage of population feeling “very happy” in a given country:

The top ranks are – wait a minute – Indonesia, India and Mexico? With a GDP per capita of 10% of what Germany or the U.S. have!
Germany particularly is not doing too well in this statistics. Might be biases a bit by the German’s general aversion against strong statements like “I am very happy”, or “I had a great day”(even if they had), but still the results give rise to some thought…

And finally we have the funny growth paradox:

A very strange concept worshiped all throughout the world, derived from the assumption that an ever-increasing GDP will make people ever-increasing happier.
This thinking comes close to a religion nowadays when I see the newspapers flooded with panicking articles every two weeks when some new “GROWTH” forecast, or “GROWTH”-report, or “GROWTH”-correction or what the hell come in.

Clearly, any sane person has to reject this strange thinking, and they are right to do so:

Development of happiness in Germany over 40 years (two different studies). More or less flat, despite of a doubling in GDP per capita. So what the heck was all the GROWTH panic for?!

…same for the US. Even a small decline in happiness here, despite staggering income gains…

An interesting case is the small country of Bhutan in the Himalaya, where they introduced a Gross Domestic Happiness Index some time ago with the political goal to maximise the people’s happiness, not their income. Once I find time to dig into this, I will come back with some more details…

Work

My other favorite topic, as this (equally to money) seems to be very overrated – at least here in Germany.

I’ll start again with a quote from the study above:

One striking finding of happiness research is that the time of day when people are least happy is when they are in the presence of their line manager. This suggests that too many managers fail to inspire their workers and rely too much on mechanical incentives and command.

How very true!

Employed life could be so much fun, wouldn’t there be this annoying bosses around all the time…

Currently Woodpecker is in the quite happy position to be very satisfied with his boss. But it took me quite a few job changes to come there, and I had a couple of really bitchy bosses in-between – so I know what I am talking about.Thinking of it, part of my current boss-satisfaction is the fact that the guy is located in another city and shows up in Munich only twice a month – fit’s well to the quote above…;)

So, if bosses, and having to listen to them, is so annoying, shouldn’t self-employment be the best way to go?

The answer from a statistical point of view is yes – with a caveat.

Yes, because other things held equal, self-employed are indeed quite more satisfied with their work and life.

However, in general (statistically), other things do not stay equal, meaning that the average self-employed has less free time, earns slightly less (surprising to me) and is slightly more prone to happiness-reducing shocks in life.

Overall, this more or less compensates the happiness effect of being your own boss.

When it comes to autonomy, some workers can completely control their quality of work, because they are self-employed.

The self-employed do worse on many job dimensions, including income, hours of work and job security, but even so they often report higher levels of overall job satisfaction than do the employed, at least in OECD countries. A positive correlation is found in American and European data, and in data from Great Britain, Germany and Switzerland.

This need not necessarily mean that the self-employed experience greater overall satisfaction with their lives, if they are sacrificing other dimensions of their lives to their job. Thus it is interesting that […] self-employment has no significant effect on overall life satisfaction.

Maybe the optimum would be self-employment combined with low materialism and thus no need to sacrifice too much free time for the business. I’d be very much interested in your first hand experience, should you venture down this road…!

inequality

A last word on the effect of inequality on happiness:

You might have noticed, you feel better in the community with people more or less your level of material well-being. Hanging around with the millionaires is no big fun, but also not with the bums under the bridge (assuming you are neither).

There you have it: In tendency, inequality produces unhappiness.

A good society is one where people meet on eye level.

Not too surprising the effect is there in all countries, but more so in Europe (where inequality socially is less accepted), and a bit less so in the U.S. (where the belief that everybody “can make” it is much stronger, thus inequality is a bit more accepted).

Quote from the link above:

This [study] finds that in both the U.S. and Europe increases in inequality have (other things equal) produced reductions in happiness. The effect has been stronger in Europe than in the U.S. This difference probably reflects ideological differences: some 70% of Americans believe that the poor have a chance of escaping poverty, compared with only 40% of Europeans.
Interestingly, the actual facts are actually the other way round: there is more intergenerational social mobility in Europe than the U.S. And there is more mobility where there is greater income equality. But attitudes have an effect on perceptions and thus on happiness.

Our influence on national inequality levels is obviously limited, but I’d tend to say, that on the level where we can easily act – locally – we should support those having less to reduce inequality. Funnily, inequality does even seem to reduce the happiness of those who have more, while act of doing good / social engagement clearly seem to increase happiness.

Well, enough, probably the post is much too long already…

…will continue this topic later.

Cheers and have a good day,

Woodpecker

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3 comments on “Interesting Facts from Happiness Research – Part One: Income, Growth and Work

  1. Interesting story! I think my boyfriend is happier, having his own business. But that is also because he is allergic to having a boss. 🙂 Not all people have that problem.

    He definitely earns more money now, so the absense of job security is less of a problem because he has a big emergency fund. It also helps that he’s really good at what he does.

  2. […] Published November 9, 2012 at 595 × 439 in Interesting Facts from Happiness Research – Part One: Income, Growth and Work […]

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