This paper examines whether the Solow growth model is consistent with the international variation in the standard of living. It shows that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data. The paper also examines the implications of the Solow model for convergence in standards of living, that is, for whether poor countries tend to grow faster than rich countries. The evidence indicates that, holding population growth and capital accumulation constant, countries converge at about the rate the augmented Solow model predicts. This paper takes Robert Solow seriously. In his classic 1956 article Solow proposed that we begin the study of economic growth by assuming a standard neoclassical production function with decreasing returns to capital. Taking the rates of saving and population growth as exogenous, he showed that these two vari- ables determine the steady-state level of income per capita. Be- cause saving and population growth rates vary across countries, different countries reach different steady states. Solow's model gives simple testable predictions about how these variables influ- ence the steady-state level of income. The higher the rate of saving, the richer the country. The higher the rate of population growth, the poorer the country. This paper argues that the predictions of the Solow model are, to a first approximation, consistent with the evidence. Examining recently available data for a large set of countries, we find that saving and population growth affect income in the directions that Solow predicted. Moreover, more than half of the cross-country variation in income per capita can be explained by these two variables alone. Yet all is not right for the Solow model. Although the model correctly predicts the directions of the effects of saving and

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A Contribution to the Empirics of Economic Growth

The literature on subjective well-being (SWB), including happiness, life satisfaction, and positive affect, is reviewed in three areas: measurement, causal factors, and theory. Psychometric data on single-item and multi-item subjective well-being scales are presented, and the measures are compared. Measuring various components of subjective well-being is discussed. In terms of causal influences, research findings on the demographic correlates of SWB are evaluated, as well as the findings on other influences such as health, social contact, activity, and personality. A number of theoretical approaches to happiness are presented and discussed: telic theories, associationistic models, activity theories, judgment approaches, and top-down versus bottom-up conceptions.

Subjective Well-Being

W. Wilson's (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of "happiness". A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB. E. Diener's (1984) review placed greater emphasis on theories that stressed psychological factors. In the current article, the authors review current evidence for Wilson's conclusions and discuss modern theories of SWB that stress dispositional influences, adaptation, goals, and coping strategies. The next steps in the evolution of the field are to comprehend the interaction of psychological factors with life circumstances in producing SWB, to understand the causal pathways leading to happiness, understand the processes underlying adaptation to events, and develop theories that explain why certain variables differentially influence the different components of SWV (life satisfaction, pleasant affect, and unpleasant affect).

Subjective Well-Being: Three Decades of Progress

W Wilson's (1967) review of the area of subjective well-being (SWB) advanced several conclusions regarding those who report high levels of "happiness" A number of his conclusions have been overturned: youth and modest aspirations no longer are seen as prerequisites of SWB E Diener's (1984) review placed greater emphasis on theories that stressed psychological factors In the current article, the authors review current evidence for Wilson's conclusions and discuss modern theories of SWB that stress dispositional influences, adaptation, goals, and coping strategies The next steps in the evolution of the field are to comprehend the interaction of psychological factors with life circumstances in producing SWB, to understand the causal pathways leading to happiness, understand the processes underlying adaptation to events, and develop theories that explain why certain variables differentially influence the different components of SWB (life satisfaction, pleasant affect, and unpleasant affect) In 1967, Warner Wilson presented a broad review of subjective well-being (SWB) research entitled, "Correlates of Avowed Happiness" Based on the limited data available at that time, Wilson concluded that the happy person is a "young, healthy, welleducated, well-paid, extroverted, optimistic, worry-free, religious, married person with high self-esteem, job morale, modest aspirations, of either sex and of a wide range of intelligence" (p 294) In the three decades since Wilson's review, investigations into SWB have evolved Although researchers now know a great deal more about the correlates of SWB, they are less interested in simply describing the demographic characteristics that correlate with it Instead, they focus their effort on understanding the processes that underlie happiness This trend represents a greater recognition of the central role played by people's goals, coping efforts, and dispositions In this article, we review research on several major theoretical approaches to well-being and then indicate how these theories clarify the findings on demographic correlates of SWB Throughout the review we suggest four directions that researchers should pursue in the decades ahead These are by no means the only questions left to answer, but we believe they are the most interesting issues left to resolve First, the causal direction of the correlates of happiness must be examined through more sophisticated methodologies Although the causal priority of demographic factors such as marriage and income is intuitively appealing, it is by no means certain Second, researchers must focus greater attention on the interaction between internal factors (such as personality traits) and external circumstances As we shall see, demographic factors have surprisingly small effects on SWB, but these effects may depend on the personalities of those individuals being studied Thus, future research must take Person X Situation interactions into account Third, researchers must strive to understand the processes underlying adaptation Considerable adaptation to both good and bad circumstances often occurs, yet the processes responsible for these effects are poorly understood Research that examines how habituation, coping strategies, and changing goals influence adaptation will shed much light on the processes responsible for SWB Finally, theories must be refined to make specific predictions about how input variables differentially influence the components of SWB In the past, many researchers have treated SWB as a monolithic entity, but it is now clear that there are separable components that exhibit unique patterns of relations with different variables In each section of this article we discuss progress and opportunities in these four areas

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Subjective well-being: Three decades of progress

https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2651&context=soss_research

Subjective Well-being

In the United States reported happiness five years ago is not comparable to present happiness. The improvement in happiness over the last five years obtained by differencing current reports of happiness today and happiness five years ago is not significantly related to the actual improvement in happiness over the same period. The currently reported five-year change in happiness is highly sensitive to current economic conditions, varying inversely with both the inflation and unemployment rates. Ordinarily, happiness five years ago as currently reported is less than present happiness, but the worse the current economic conditions are, the better the past looks relative to the present. If current economic conditions get bad enough, past happiness will be rated higher than present. Reports of happiness five years ago are not telling us about the utility respondents actually experienced at that time; they are telling us, instead, about respondents' current decision utility–which situation, today's or that five years ago, they would opt for if given the choice today.

Is Reported Happiness Five Years Ago Comparable to Present Happiness? A Cautionary Note

When applied to monthly age specific data, Granger-Sims causality tests provide a useful technique for identifying the effective lag between business cycles and fertility in the United States. Male and female monthly age specific unemployment rates are used as a proxy for the business cycle, and test results are presented for first and higher order birth rates, as well as total age-specific monthly fertility rates. The period is subdivided (January 1958 – May 1973 and June 1973 – December 1984) in order to identify possible trends. Four results hold in all cases studied, with respect to the relationship between unemployment and fertility. (1) Noncausality is rejected in the direction from unemployment to fertility, and no ‘feedback’ effect is indicated; thus the relationship is one of simple causality. (2) In the ‘critical’ decision period from 9–16 months prior to realized fertility rates, the sign of the effect of unemployment on fertility is negative: this holds for both male and female unemployment rates. (3) There appears to have been a shortening of the effective lag between unemployment and fertility, of perhaps 2 – 3 months, between periods 1 (1959 – 1973) and 2 (1973 – 1984). (5) The strength of the (negative) relationship between unemployment and fertility appears to have increased from period 1 to period 2.

Application of Granger-Sims causality tests to monthly fertility data, 1958–1984

Early in the life cycle material preferences or aspirations are fairly similar among income groups, and those with more income consequently have higher utility, and are happier. Over the life cycle material aspirations rise in proportion to income, undercutting the favorable effect of income growth on utility. The cross sectional difference in happiness by level of income persists,but for any given status group happiness remains constant over the life cycle.

The Income — Happiness Relationship

Introduction, 63. — I. Growth of output and resources, 64. — II. Resource allocation and income distribution, 76. — III. Future problems, 83.

Richard A. Easterlin

Papers

Is Reported Happiness Five Years Ago Comparable to Present Happiness? A Cautionary Note

Application of Granger-Sims causality tests to monthly fertility data, 1958–1984

The Income — Happiness Relationship

Israel's Development: Past Accomplishments and Future Problems

Review Symposium@@@World Development Report 1984