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Massive economic growth does little for happiness in China

Man in a rice field in China. Photo by: Rhett A. Butler.
Man in a rice field in China. Photo by: Rhett A. Butler.

Economic growth alone may not raise happiness, according to a recent study in the Proceedings of the National Academy Science (PNAS). Despite a stunning economic growth rate of around 10 percent per year over the last two decades, China’s people have not seem a big boost in their overall life satisfaction.

“There are many who believe that well-being is increased by economic growth, and that the faster the growth, the happier people are. There could hardly be a better country than China to test these expectations,” explains Richard Easterlin, lead author with the University of Southern California. “But there is no evidence of a marked increase in life satisfaction in China of the magnitude that might have been expected due to the enormous multiplication in per capita consumption. Indeed people are slightly less happy overall, and China has gone from being one of the most egalitarian countries in the world in terms of life satisfaction to one of the least.”

According to the study, 71 percent of Chinese in the wealthiest income bracket reported high levels of life satisfaction, up slightly from 68 percent in 1990. However, those in the middle income remained largely stable, while life satisfaction for China’s lower classes fell dramatically in the last two decades. In 1990, 65 percent of those in the poorest income bracket reported high life satisfaction; today only 42 percent report the same. This income bracket remains the bulk of China’s population.

Easterlin says that high unemployment and the loss of a social safety net is in part to blame for the decline in “happiness” for China’s poor.

“There is more to life satisfaction than material goods, and there is an important policy lesson here for the Chinese government and policymakers generally: among ordinary Chinese people, especially the less educated and lower-income, jobs and income security, reliable and affordable health care, and provision for children and the elderly, are of critical importance to life satisfaction,” he says.

Easterlin is the father of the eponymous ‘Easterlin Paradox,’ which theorizes that money does not directly relate to happiness once material needs are met. Instead, relative income—i.e. how much you made compared to those around you–is a more important factor in predicting happiness. In other words, social inequalities were more important than GDP.

However Easterlin’s ideas remain controversial with some economists and recent studies have been put forward challenging the theory. All sides agree, however, that better and longer term data on life satisfaction would grant a clearer picture.

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