Money can't buy happiness, but being happy pays
Date
September 18, 2013
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Daniella Miletic
Social Affairs Editor, The Age
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Does being happy make you better off financially?
After years of studying the influence money has on happiness, one Australian economist set out to examine the reverse.
''Income doesn't have a significant effect on happiness, but I wondered if happy people were more productive than others, and if happy people could affect their income generation through how much they worked,'' said Satya Paul, professor of economics at the University of Western Sydney and author of the study.
Using research from the Household, Income and Labour Dynamics in Australia (HILDA) survey, Professor Paul studied the self-rated happiness levels of 9300 people between 2001 and 2005. He found happier people get more done at work and are paid more.
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''We found happy people are more active, more productive and get less upset by the work,'' he said.
Professor Paul found that when other income factors such as age, education and geographic location were the same, Australians who were most satisfied with their life earned about $1766.70 a year more than people at the bottom of a happiness scale of zero to 10. For every one point rise in happiness on this scale, he found, a person's income rose by $176.67.
His findings, to be presented at the HILDA Research Conference next month at the University of Melbourne, also revealed there were two classes of happy workers: those who wanted to work more hours because they enjoyed the work (resulting in fatter pay packets) and those who wanted to work less in order to have a better work-life balance (taking more holidays and often feeling more relaxed and productive at work). ''Happiness affects hours, happy people tend to work more, and their incomes increase,'' he said.
''Also, happy people can like to have more leisure time in their lives, and work less … but can be more productive because of that leisure time.''
As part of the study, Professor Paul examined the influence of other factors on income and found that poor health adversely affected productivity at work, resulting in a decline of income by $793.83 per year.
He also found university degree holders earn $8408 more than others and that females earn about $8781 less than males.
He found people who lived in big Australian cities earn about $2077 more a year than people who live in smaller cities. The average age at which people reached their highest income level was 50.
The focus of his examination - happiness - was also found to reduce inequality. The reason for this, Professor Paul explained, is that happy people tend to get the same size wage increase as their high income colleagues - meaning that their wage increases tend to be proportionately higher. ''This is a lesson we can take, the more happy people are, the less inequality in incomes we can have in society,'' he said.
Professor Paul did a study four years ago on how income influences happiness. That study found rich people were not happier than poor people and that happiness did not seem to increase with higher income.
The study found that people in the bottom fifth of income earners in 2005 rated themselves on average at 7.99 on a happiness scale of zero to 10, about the same as those in the top income bracket.
Read more:
http://www.smh.com.au/lifestyle/lif...-happy-pays-20130917-2tx7o.html#ixzz2fCK4jj00
