Creative Class

Earlier this week, I discussed the new Gallup-Healthways Well-Being Index of happy cities. Today, with the help of my Martin Prosperity Institute colleague Charlotta Mellander, we take a look at some of the social, demographic, and economic factors that are associated with the happiness and well-being of cities.

There has been considerable debate on the factors that are associated with happiness and well-being at the national level. The well-known Easterlin Paradox suggested that happiness tends to level off after a certain income threshold. Psychologists, notably Edward Diener, have argued that factors such as health, challenging work, and close social relationships, among others, play a considerable role in happiness. Some have even made the case for instituting a new measure of gross national happiness to supplement conventional metrics like gross national product.

Recent studies by Princeton University’s Angus Deaton and Justin Wolfers and Betsy Stevenson of the University of Pennsylvania’s Wharton School question the Easterlin Paradox and indicate a closer link between happiness and income across nations. Carol Graham raises the enigma of the “happy peasant and the miserable millionaire” as a way to resolve this apparent paradox. Graham suggests that happiness is relative to one’s position in society. Take unemployment for example. Unemployment is crushing for previously employed people in places where gainful employment is the norm. But people in poor countries where unemployment is more the norm find other ways to be happy. (more…)

Over the past week, I’ve discussed the role of class in economic performance, innovation, and entrepreneurship. But what about happiness? There is considerable debate over the happiness of nations. The Easterlin paradox suggests that there is little or no relationship between a country’s economic development and its level of happiness in comparison to others. A recent influential paper by economists Justin Wolfers and Betsey Stevenson contradicts the Easterlin paradox, finding a clear relationship between economic development (measured as GDP per capita) and happiness. In other words, countries that increase their wealth become happier, and countries that increase their wealth more than other nations become happier than others.

But what about the effects of class on happiness? Are societies in which a greater share of workers are members of the creative class on balance happier than those with large working class populations?

To get at this, Charlotta Mellander used data on happiness – measured as overall life satisfaction – from the Gallup Organization’s World Poll.

The results could not be more striking. Happy nations appear to be creative class nations.

Nations with a large concentration of the working class are far less happy. In fact they appear downright unhappy. Perhaps Marx was right after all about the alienation that comes from industrial work – or, in this case, the unhappiness found in working class locations.

Source of all graphics: Martin Prosperity Institute

We’ll be doing more on the connection between class structure and the happiness of nations in the future, so stay tuned.