Lane Kenworthy, The Good Society
October 2020

Happiness consists of some combination of three elements: life satisfaction, which involves an appraisal of the overall condition of one’s life; positive feelings, such as pleasure and joy; and negative feelings, such as worry, frustration, anger, and sadness. Though happiness isn’t the only outcome on which a society should be judged, it clearly matters. And for some it is at the top of the list.¹

Two facts about happiness in the United States are puzzling. First, despite a variety of favorable developments, Americans haven’t, on average, gotten happier over the past half century. Second, despite our comparative affluence, Americans are only in the middle of the happiness pack among the world’s rich nations. But before exploring these puzzles, how do we measure happiness and what are its chief determinants?

Skip to:

• Measuring happiness
• Determinants of happiness
• Can happiness change over time?
• Why hasn’t happiness increased in the United States?
• Why aren’t Americans happier than their counterparts in other rich democratic nations?
• How can we increase happiness?

MEASURING HAPPINESS

Scientists measure happiness mainly via public opinion surveys. People are asked questions such as:

• “Taken all together, how would you say things are these days — would you say that you are very happy, pretty happy, or not too happy?”
• “All things considered, how satisfied are you with your life as a whole these days?” Respondents are instructed to indicate their satisfaction on a scale of 0 to 10.
• “Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?”

Since the early 1970s, the General Social Survey (GSS) has regularly asked a representative sample of American adults the happiness question. Eurobarometer has regularly asked a version of the life satisfaction question in many European nations since the 1970s. In five-year intervals since the early 1980s, the World Values Survey has asked happiness and life satisfaction questions in a number of countries. Since 2005, the Gallup World Poll has asked adults in most of the world’s nations the ladder question.

Can we trust these measures to accurately tap people’s subjective well-being? Yes. Responses tend to correlate strongly with the assessments of friends and family and with clinical assessments. There is no indication of desirability bias in responses. When the same people are asked these survey questions over time, their responses tend to be consistent, with predictable changes in the face of major life shocks such as divorce and unemployment. And when people are asked both the happiness question and the life satisfaction question, their answers are strongly correlated.²

DETERMINANTS OF HAPPINESS

What causes happiness? For any given person, genetics and unique individual circumstances play an important role. But scientists have identified a number of other important contributors.³

Physical health. Physical health is positively associated with happiness. Healthy life expectancy is one of the best predictors of life satisfaction across countries. Obesity has a separate happiness-reducing effect.⁴

Perceived health may matter as much or more for happiness than actual health. Over the years 1972 to 2018, Americans who said their health is poor had an average happiness score of 4 on a scale of 0 to 10; those who said their health is excellent had an average happiness score of 7. Comparing across Americans, subjective health is perhaps the most influential determinant of happiness.⁵

Mental health. Poor mental health, such as diagnosed depression or anxiety disorder, is one of the strongest predictors of low happiness.⁶

A generous welfare state. Worry about finances is the stressor that tends to be most damaging for happiness.⁷ Average life satisfaction is higher in countries with public insurance programs that provide a more generous cushion to people who fall victim to economic and social risks.⁸

Income. It used to be conventional wisdom that higher income increases happiness. Then, in the mid-1970s, Richard Easterlin posited that income boosts happiness only up to a point, after which it yields no further benefit.⁹ This came to be known as the “Easterlin paradox.” Recent studies with improved data haven’t yielded a definitive conclusion as to which view is correct.

Figure 1 shows the pattern across individuals in the United States, and figure 2 shows the pattern across countries. Additional income increases happiness less at high income levels than at low income levels, but the increase does continue at high levels.¹⁰

What about when we look at countries over time? One recent study, by Betsey Stevenson and Justin Wolfers, concluded that as nations get richer over time, their average happiness has tended to rise.¹¹ A follow-up analysis by Easterlin and colleagues found that the association identified by Stevenson and Wolfers was based mainly on short-run developments, with happiness rising during periods of economic growth and declining during recessions, whereas long-run trends suggest no association between national income and average happiness.¹²

Income inequality. People compare their income to others, so relative income, not just the absolute level, may affect happiness. If so, higher levels of income inequality will tend to reduce happiness.¹³

Education. People with more education tend to be happier, though the payoff comes largely via higher income.¹⁴

Age. Among adults, happiness tends to decrease steadily until middle age — the late forties — and then begins to rise.¹⁵

Unemployment. Being unemployed (wanting a job but unable to get one) decreases happiness. In the General Social Survey data, for example, 32-36% of Americans employed full-time, employed part-time, or “keeping house” say they are very happy, compared to just 18% of those who are unemployed. An analysis of European countries in the years 2002-2018 finds that being unemployed reduces life satisfaction by three-quarters of a point on a 0 to 10 scale, an effect similar in size to that of health and income.¹⁶

Work conditions. Autonomy at work tends to increase happiness. Work stress and a long commute to work are associated with lower happiness.¹⁷

Labor market flexibility. In rich countries, life satisfaction tends to be higher where there aren’t stiff regulations limiting hiring and firing.¹⁸

Social support, family, friends. Having someone to count on in time of trouble, being married, and having close friends are positively associated with happiness.¹⁹

Leisure time. Taking more vacation days, outsourcing disliked household chores, and spending time with family and friends instead of at a job tend to increase happiness.²⁰

Quality of government. People in countries with greater perceived government effectiveness tend to be happier, and when government effectiveness increases, happiness tends to rise.²¹

Freedom to make life choices. Persons who feel they have the freedom to choose what to do with their life tend to be happier.²²

Individualism. People tend to be happier in societies with “individualist” rather than “collectivist” value orientations. This refers to cultural norms that encourage people to think of themselves as autonomous individuals as opposed to norms that encourage conformity or obedience to authority.²³

Tolerance. Tolerance of diverse lifestyles is positively associated with happiness.²⁴

Trust. Trust in other people is positively correlated with happiness.²⁵

Religiosity. Frequency of attendance at religious services is positively associated with happiness, though this may be chiefly because it increases friendships.²⁶

CAN HAPPINESS CHANGE OVER TIME?

People have a strong propensity to adapt to changes in life circumstances and revert to their earlier level of happiness. Yet average happiness in a country can and does change, for two reasons. First, adaptation is partial; some individuals do experience lasting changes in happiness over time.²⁷ Second, even if the happiness of particular individuals remains constant, if average happiness among younger cohorts is lower or higher, cohort replacement will produce a change in overall average happiness over time.

Figure 3 shows trends in life satisfaction in the world’s rich democratic nations since the early 1970s. All of these countries have experienced economic growth and rising life expectancy during this period, and yet the data suggest that most have had either stagnant or slightly declining life satisfaction.

WHY HASN’T HAPPINESS INCREASED IN THE UNITED STATES?

Figure 4 shows the average level of happiness and life satisfaction among American adults since the early 1970s. Both measures have been essentially flat, perhaps with a decline since around 2000.

Figure 5 shows the shares responding not too happy, pretty happy, and very happy to the General Social Survey’s happiness question. Between the early 1970s and 2000, the pretty happy share increased and both the not too happy and very happy shares fell, yielding little if any change in average happiness. Since 2000, the very happy share has declined and the not too happy share has increased.

Figure 6 shows the share of Americans who say they are satisfied with how things are going in their personal life. This too has been flat since the 1970s.

The lack of increase in happiness since the early 1970s is surprising because a number of known happiness boosters have improved during this period:

• Rising life expectancy
• Rising GDP per capita
• Rising educational attainment
• Lower unemployment
• Greater tolerance

Life expectancy has increased from 71 years in 1972 to 79 in 2016.²⁸ GDP per capita doubled between 1972 and 2016 (in inflation-adjusted dollars).²⁹ Educational attainment has increased; for instance, the share of American adults with four years of college or more rose from 12% in 1972 to 33% in 2015.³⁰ Even with the deep economic downturn in 2008 and subsequent slow recovery, the unemployment rate fell from an average of 7% during 1972-1990 to 6% during 1991-2016.³¹ And Americans have grown increasingly tolerant; for example, the share saying homosexuality is “always wrong” dropped from 73% in 1973 to 40% in 2016.³²

Given these developments, what accounts for the lack of increase in average happiness? Do these happiness boosters no longer have an impact? While that’s possible, the stagnation in happiness is more likely due to a variety of offsetting developments:

• Declining perceived physical health and more obesity
• Slow household income growth
• Rising income inequality
• Less marriage
• Increased time stress
• Reduced trust
• Declining religiosity
• The baby boom and happiness over the life cycle

Perceived health among American adults didn’t improve in the 1970s, 1980s, or 1990s. Then it decreased in the mid-to-late 2000s.³³ And the incidence of obesity has risen sharply since 1980.³⁴

For most Americans, the income growth that’s occurred since the early 1970s may have been too slow to improve happiness. While GDP per capita has nearly doubled, median household income has risen only modestly. And that increase owes mainly to the fact that more and more households have shifted from one earner to two, so lots of Americans may feel no better off despite substantial economic growth.³⁵ Moreover, since 1980 income inequality has risen sharply in the United States, so if Americans are making relative comparisons, many may feel their economic situation has gotten worse rather than better.³⁶

The share of 35-to-64-year-olds who are married declined from 88% in the early 1970s to 63% in 2016.³⁷ Since the advent of the iPhone in 2007, smartphones and social media have increased the degree to which our leisure time is interrupted, which makes us feel more time stressed.³⁸ Average commute time has increased steadily since the 1970s.³⁹ The share of Americans saying “most people can be trusted” has dropped steadily since the early 1970s.⁴⁰ Attendance at religious services has decreased in recent decades.⁴¹ The movement of the large baby boom generation through the happiness life cycle may also have depressed average happiness; baby boomers (born 1946 to 1964) were on the downward part of the happiness life-cycle curve beginning in the late 1970s and began reaching the low point (late forties) around 1990.

So the explanation for stagnant happiness among Americans seems to be that while a number of happiness boosters have improved, their impact has been offset by lack of improvement, or worsening, of some important happiness depressors.

Whatever the causes, it’s worth noting that the United States isn’t alone in its failure to improve. As we saw in figure 3 (above), that’s been true in many of the world’s affluent democratic countries.

WHY AREN’T AMERICANS HAPPIER THAN THEIR COUNTERPARTS IN OTHER RICH DEMOCRATIC NATIONS?

Figure 7 shows the association between life satisfaction and GDP per capita among the rich democracies. The United States underperforms: it lies below the line, ranking fourth in affluence but only fourteenth in life satisfaction. Why is that?

Here too it makes sense to think about happiness boosters and depressors that might offset America’s comparatively high GDP per capita. Prime suspects include:

• Public goods, services, and insurance programs
• Health: longevity and obesity
• Income inequality
• Education
• Family
• Social support
• Trust
• Freedom to make life choices

An expansive and generous array of public goods, services, and insurance programs gets rid of some of life’s biggest worries, which is likely to reduce the share of people with low life satisfaction. The Nordic countries have the world’s most robust welfare states, and figure 8 shows that in each of those four countries the share of adults who rate their life satisfaction as 6 or below (on a scale of 1 to 10) is 10-15 percentage points lower than in the United States, where public insurance programs are less developed.⁴²

However, we also see in figure 8 that a larger share of people in the Nordics say their life satisfaction is very high (9 or 10) than in the US. While public social programs might contribute to this, there likely is more to the story.

In health, America is at or near the bottom among the rich countries. The US has the lowest life expectancy and the highest incidence of obesity.⁴³

If the effect of income on a person’s happiness is partly relative — that is, affected by their position in comparison to others in their society — then countries with higher income inequality should tend to have lower happiness. Income inequality is greater in the United States than in any other affluent nation.⁴⁴

The US is middling or below on several measures of educational attainment, including college completion among recent cohorts, the share of adults with at least secondary education, and literacy.⁴⁵

The US has one of the lowest shares of households consisting of a couple, and the highest with just one adult.⁴⁶

The Gallup World Poll includes a question asking “If you were in trouble, do you have relatives or friends you can count on to help you whenever you need them, or not?” This is a good predictor of life satisfaction, and Americans are less likely than their counterparts in a number of other rich nations to say they have someone they can count on to help.⁴⁷

Compared to other rich nations, Americans are middle-of-the-pack when it comes to trusting others.⁴⁸

Another Gallup World Poll question asks “Are you satisfied or dissatisfied with your freedom to choose what you do with your life?” On average, those who respond “satisfied” tend to have higher levels of life satisfaction. Despite the emphasis on liberty in the United States, respondents in the Nordic countries and some others are more likely than Americans to say they feel free in this respect.⁴⁹

HOW CAN WE INCREASE HAPPINESS?

Larger increases in income for ordinary Americans, both in absolute dollars and relative to people at the top, probably would help. So would expanding public insurance programs, reversing the rise in obesity, boosting educational attainment, keeping the unemployment rate low, and reducing commute time. As it happens, these are all win-win strategies in the sense that they would be valuable in and of themselves, apart from their impact on subjective well-being.

But we don’t have a good sense of which would help most. There are many plausible culprits for why happiness hasn’t increased in the United States over the past half century and why it’s lower than it should be compared to other affluent democratic nations, and researchers haven’t provided a compelling assessment of their relative importance. Though our understanding of happiness has improved significantly, we have a long way yet to go.