Day 4: Happiness in Economics
According to the World Happiness Report 2020: Finland, Denmark and Switzerland are regarded as the top three happiest countries, in that order.
Switzerland has been considered the number one ‘happiest’ country for three years straight, resulting in several studies taking place to better understand why this is.
*Empirical research published in Journal of Happiness Studies, showed a correlation between a smaller gender pay gap and increasing happiness. Finland is one of few countries actively trying to reduce this gap as best they can, resulting in a potentially happier female population.
However, the World Happiness Report 2020 ranks: Zimbabwe, South Sudan and Afghanistan as the three least happy countries. This result doesn’t seem unexpected; the clear problems and consequences that these countries face would inevitably result in an unhappy population.
Zimbabwe is an example of how a healthy economy can lead to a happy population. In 2009 Zimbabwe experienced severe hyperinflation, rendering their currency valueless and their economy critically damaged. Afghanistan and South Sudan are some of the most poverty stricken countries on the planet. While several studies show that after a certain degree, wealth doesn’t guarantee happiness, poverty is one of the leading reasons for sadness. Poorness aside, both these countries have endured civil war and terrible loss; all these detrimental factors are at the expense of the population’s happiness.
The United Kingdom ranks 13th on the list, with the United States coming in five places lower at 18th. While both are relatively high positions, it may be surprising as both countries are extremely wealthy. Now despite GDP per capita being high and having the freedom to vote and participate in a functioning and modern society, people aren’t pleased with the status quo.
The importance of measuring happiness:
It is becoming ever more important to measure happiness, this tool provides us with the ability to compare physical health to economic growth. It is highly suggested that happiness levels have an influence on macroeconomics. Economic growth and happiness are tightly linked, so being able to understand how to keep a population content is vital to maintaining a growing economy. This occurs because of increased productivity levels, micro-level behavioural alterations committed by the average worker are often influenced by their quality of life. By having a workforce that contributes large amounts of effort, there is no doubt the economy would benefit vastly. However being able to gauge these effects is difficult and methods often include mass surveys.
