Unemployment & Happiness
Happiness is probably as the old topic. Most experts such as psychologists, philosophers, even economists concerned with the definition what is the happiness. However, there is not the concordant view for what is the happiness. Happiness should depend on different people. Some people believe that the happiness is the good goal in life. But, other people do not think happiness is the good goal in life because there are some other factors can affect the happiness such as trust, satisfaction with job, satisfaction with family's life, marriage, etc. Therefore, because happiness is a very elusive concept, we cannot judge people is happiness or unhappiness directly. Using the economics to judge happiness could be the easy way even though there are some imperfections, so that will follow the relationship between unemployment and happiness in this essay.
2. Incomes and Happiness
Most economics believe that unemployment is an unfortunate event for happiness; it has negative influence for happiness. According to common sense, it should be connected with income because people always think the less income may make happiness goes down. But is it true? Is more income better? According Easterlin Paradox, “high income do correlate happiness, but long term, increased income does not correlate with increased happiness”(1). “Richard Easterlin (1974) is the first economist to seriously study the data on happiness, he conclude that money does not buy happiness (2). There are two graph can show clearly, from 1945 to 1990, the real GDP per capita (in 1996 US$) had the huge increase that increase more than 5 times. For the average happiness, it should have the similar trend with income, but it was not. From 1945 to 1955, there was the same trend that income and average happiness increased, however, after 1955, there was the significant reduce until 1965. After that, America had the transitory rise. But, around 1966, the average happiness had the
3.Unemployment and Happiness
Also, in the book Happiness and Economics: How the Economy and Institutions Affect Human Well-Being, there is the example to prove that income may not the necessary reason to cause the unhappiness. “In Switzerland, to give a concrete example, depending on previous and on circumstances (for example, whether one has children or is disabled), unemployment benefits make up either 70 or 80 percent of the past income. With an income level of 70 or 80 percent compared to previous paid employment, the probability that an unemployed person states that he is “completely satisfied” is 20.6% points lower due to “pure” unemployment effect. If the income level is not controlled for, the overall effect on happiness of becoming unemployed is estimated. In the sample for Switzerland this effect is minus 21.5 % point. If the “ pure” effect of being unemployed is subtracted from the overall effect, an approximation of the long-term effect due to a...