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Economic Growth and Subjective Wellbeing

Compiled by the Gallup Poll Editors

The “Easterlin paradox” suggests that there is no link between a society’s economic development and its average level of happiness. We reassess this paradox, analyzing multiple rich datasets spanning many decades.Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective wellbeing and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective wellbeing. We show that the estimated relationship is consistent across many datasets and is similar to that between subjective wellbeing and income observed within countries. Finally, examining the relationship between changes in subjective wellbeing and income over time within countries, we find economic growthassociated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

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