Carol Graham

Does Happiness Pay? An Exploration Based on Panel Data from Russia

Well-being research has supported the common sense view that income, health, and other factors affect happiness. We use panel data from Russia to assess the reverse causation — that happiness itself affects income, health, and other factors. We find that people who had higher “residual happiness” in 1995 – people who were happier after correcting for the usual determinants of well-being – made more money and were in better health in a survey 5 years later. Psychologists attribute a large part of well-being to factors such as self-esteem and optimism. The same factors appear to influence individuals’ wealth and health.

Happiness And Health: Lessons—And Questions—For Public Policy

This paper reviews the happiness-health relationship from an economics perspective, highlighting the role of adaptation. Peoples expectations for health standards influence their reported health and associated happiness, a finding that roughly mirrors the Easterlin paradox in income and happiness. Research on unhappiness and obesity shows that norms and stigma vary a great deal across countries and cohorts, mediating the related well-being costs. Better understanding this variance and its effects on incentives for addressing the condition is important to policy design. More generally, the paper discusses how happiness surveys can-and cannot-inform public health policy.

Does Economic Crisis Reduce Support for Markets and Democracy in Latin America? Some Evidence from Surveys of Public Opinion and Well Being

The severe economic crisis facing several countries in the region over the last couple of years has led many observers to predict a backlash against market policies and even against democracy in the region. An economic crisis of such proportions should also, in theory, have negative effects on subjective well being. Our analysis, based on the Latinobarometro surveys from 2000–2002, finds some unexpected positive trends, as well as notable differences between those countries that suffered from crises and those that did not. Satisfaction with market policies and with the way democracy is working has decreased among all groups except the very wealthy. In contrast, support for democracy as a system of government has increased, suggesting that respondents are increasingly distinguishing between democracy as a system of government, and the manner in which particular governments are performing. We also find evidence of changing attitudes towards redistributive taxation among the wealthy. JEL Codes . D63 (welfare economics, equity, justice, inequality); D84 (information and uncertainty, expectations); I31 (general welfare; basic needs; quality of life); J62 (mobility, unemployment, intergenerational mobility)

Well-being and unemployment in Russia in the 1990s: Can society's suffering be individuals’ solace?

This paper studies the effect of regional unemployment rates on subjective well-being in post-Soviet Russia. Research conducted in Europe and the United States has documented that higher unemployment rates lead to lower reported life-satisfaction. By contrast, our Russian study finds a small but significant effect in the other direction. We estimate that during the period of our study (1995-2001), each percentage point increase in the local unemployment rate was correlated with the average well-being of people in the region increasing by an amount equivalent to moving 2% of the population up one level in life satisfaction measured on a five-point scale. Our intuition is that the so-called comparison effect drives this result: when individuals observe their peers suffering in a troubled economy, they lower their standards of what is good enough. All else equal, they thus perceive themselves to be better off in worse times. In highlighting the dependence of subjective well-being scores on expectations and reference groups, we sound a note of caution against using happiness data from economies in crisis to draw macroeconomic policy conclusions.

Which health conditions cause the most unhappiness

This paper assesses the effects of different health conditions on happiness. Based on new data for Latin America, we examine the effects of different conditions across age, gender, and income cohorts. Anxiety and pain have stronger effects than physical problems, likely because people adapt better to one-time shocks than to constant uncertainty. The negative effects of health conditions are very large when compared with the effects of income on happiness. And, while higher peer income typically elicits envy, better peer health provides positive signals for life and health satisfaction. Health norms vary widely across countries.

The politics of protecting the poor during adjustment: Bolivia's emergency social fund

Abstract The Emergency Social Fund (ESF), a compensatory scheme implemented as a complement to Bolivias dramatic structural reform plan, attracted a great deal of both national and international attention, and there have been several attempts to set up similar programs in Latin America and Africa. Enthusiasts of the ESF cite its demand-based approach, its efficiency and transparency, and its rapid results. Critics question the programs ability to provide permanent poverty alleviation or to target the poorest sectors, and its institutional position outside the public sector. This study analyzes the impact of the ESF on politics and on the sustainability of the adjustment process. It also evaluates the ESFs effects on central and local level institutions, nongovernment actors, and the poor. The study seeks to enhance efforts to protect the poor during adjustment, and to identify the contributions such efforts can make to the political sustainability of the process.

Gender and well-being around the world

We explore gender differences in reported well-being around the world, both across and within countries - comparing age, income, and education cohorts. We find that women have higher levels of well-being than men, with a few exceptions in low income countries. We also find differences in the standard relationships between key variables - such as marriage and well-being - when differential gender rights are accounted for. We conclude that differences in well-being across genders are affected by the same empirical and methodological factors that drive the paradoxes underlying income and well-being debates, with norms and expectations playing an important mediating role.

Variance in Obesity Across Cohorts and Countries: A Norms-Based Explanation Using Happiness Surveys

We use well being surveys to help explain the variance in obesity incidence across socioeconomic cohorts in the United States and Russia, with a focus on the role of norms. In the U.S., obesity is largely a poor peoples problem, and the same groups suffer higher well being costs from being obese. Poor whites have higher obesity-related well being costs than blacks or Hispanics. Respondents in the top income quintile who are obese and those who depart from the weight norm for their profession also suffer higher well being costs than the average. Stigma seems to be higher for those in higher status professions. We find modest evidence that causality runs from overweight to depression rather than the other way around. In Russia, in contrast, obesity and well being are positively correlated. The relationship seems to be driven by the prosperity that is associated with obesity rather than by the excess weight per se, and we find no evidence of stigma. In both countries, there is a wide margin in both countries for tailoring public health messages to marshal the attention of very different cohorts.

Employment, late-life work, retirement, and well-being in Europe and the United States

Flexible work arrangements and retirement options provide one solution for the challenges of unemployment and underemployment, aging populations, and unsustainable public pension systems in welfare states around the world. We examine the relationships between well-being and job satisfaction on the one hand and employment status and retirement, on the other, using Gallup World Poll data for several European countries and the United States. We find that voluntary part-time workers are happier, experience less stress and anger, and have higher job satisfaction than other employees. Using statistical matching, we show that late-life workers under voluntary part-time or full-time arrangements have higher well-being than retirees. There is no well-being premium for involuntary late-life work and self-employment compared to retirement, however. Our findings inform ongoing debates about the optimal retirement age and the fiscal burdens of public pension systems.JEL codesJ14; J21; J26; J28; I31; Z18

Making Foreign Aid Work

Foreign aid is facing difficult times. Even some aid practitioners have called its effectiveness into question. While aid has had success in humanitarian relief, family planning, and reducing infant mortality, its record in promoting economic growth has been mixed. Economic growth is not the sole objective of U.S. foreign aid, and it may be the least important goal for policymakers concerned with security, short term solvency, human rights, or democracy. But the effects of aid on growth can be measured empirically, and growth is a necessary condi tion for meeting most of the broad objectives of aid. While aid has succeeded in promoting growth in some countries, in many others it has failed or even been counterproductive. A number of countries, many in sub-Saharan Africa, are poorer than when they began receiving aid several decades ago. Donors have often subsidized unsound economic policies. In such situations, foreign aid has perpet uated poor policies and weak economic performance. The solution is not to end or even reduce aid flows, but for donors to allocate resources more selectively. In the 1960s and 1970s, aid was driven primarily by the security con cerns of the Cold War, with an underlying focus on reducing poverty. During the debt crisis of the 1980s, the rationale for aid shifted to