… and the Pursuit of Happiness - Institute of Economic Affairs

… and the pursuit of happiness
are more equal countries happier?
The ‘non-relationship’ between happiness and equality
Having made the doubtful assumption that economic stagnation
does not make people miserable, the growth sceptics have further
hypothesised that equalising incomes will achieve what raising
incomes apparently cannot. It has been suggested that people
living in ‘more equal’ societies are happier than those who live in
countries where the gap between rich and poor is wider. If so, it
would mean that wealth redistribution is more important than
wealth creation. By a happy coincidence, that is exactly what those
who make such claims have always believed.
The idea that egalitarian societies enjoy higher life satisfaction
scores is more widely held by political commentators and leftwing
activists than by those who are familiar with the academic
literature. The Guardian columnist Polly Toynbee insists that
‘every model shows that the most unequal societies are the least
happy’. This is simply untrue. Even the book Toynbee cites as
supporting evidence – The Spirit Level – never explicitly states
that more equal societies score higher in surveys of happiness and
wellbeing.
The take-home message of The Spirit Level certainly seems to
be that ‘more equal societies are happier’, but these are words that
have been put in the mouths of its authors Richard Wilkinson
and Kate Pickett, albeit without much of a struggle from the two
social epidemiologists. When pressed on this question, they have
conceded that ‘there is no relation between inequality and WVS
[World Values Survey] measures of happiness’ (Wilkinson and
Pickett, 2010), although they have complained that self-reported
evidence is ‘notoriously unreliable’.
Unreliable it may be, but not so unreliable as to prevent
Wilkinson and Pickett from using the self-reported happiness
statistics in The Spirit Level’s opening pages to show that ‘happiness
levels fail to rise further as rich countries get still richer’ (ibid.:
8). 2 With this nod of the head to the Easterlin paradox, they spend
the rest of the book making the case that although economic
growth has reached the limits of utility, reducing income
inequality will improve a nation’s performance in everything from
infant mortality to the amount of rubbish that is recycled.
That these improvements will lead to greater happiness is so
strongly implied that Toynbee can be forgiven for her error. But
while the book includes dozens of graphs showing how nations
perform across various criteria, the happiness data are never put
to the same test. Although the happiness surveys are considered
reliable enough to challenge the conventional belief that higher
incomes lead to greater happiness, the hypothesis that greater
income equality leads to greater happiness is never required to
meet the same burden of proof. There is a good reason for that.
Figure 10 shows the total lack of correlation between income
inequality and happiness in the world’s richest countries.
Self-described egalitarians are eager to cite the straight line of
subjective wellbeing since 1965 as damning proof that economic
growth is useless, but they seldom mention that inequality has
also had no observable effect on happiness in the last 50 years. In
light of Easterlin’s work, no test could be more obvious than to
compare rates of inequality with levels of happiness over time, but
remarkably few social scientists have bothered to do so. Arthur C.
Brooks is a rare exception (Brooks, 2007). By studying the results
of America’s General Social Survey (GSS), he found a conspicuous
lack of association between the two variables:
2 Other self-reported measures such as trust and child wellbeing are also included
in The Spirit Level.
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