What is happiness? Many ponder that question, from philosophers like Aristotle and Socrates, to contemporary researchers and academics. Indeed, many have investigated a hypothesized correlation between money and happiness, with a landmark 1974 study by Richard Easterlin arguing the conclusion that income does not inherently promote happiness (Gomez-Mejia, Balkin, & Cardy, 2012). Easterlin instead suggested that one’s income relative to their peers matters rather than their absolute income, as highlighted by his finding that while rich people are generally happier than poor people, rich countries are no happier than poor countries. That said, Stevenson and Wolfers (n.d.) published new research that goes against Easterlin’s central point and in fact, claims that “1. Rich people are happier than poor people. 2.
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3. As countries get richer, they tend to get happier” (as cited in Gomez-Mejia, Balkin, & Cardy, 2012). These new findings are based on a broad wealth of data that, as Stevenson and Wolfers argue, Easterlin did not have available 35 years ago. Since a Gallup Survey showed that respondents at a higher income level are likelier to call themselves happy than those near the poverty line, Stevenson and Wolfers make the conclusion that “absolute income matters,” that money does indeed lead to happiness. Gomez-Mejia, Balkin, and Cardy (2012) report that two British economists recommend policy goals that focus more on happiness than GDP in light of these findings while at the same time, Easterlin now capitulates his point to the new research findings. That said, he does maintain that money is not the sole reason behind happiness and other social policy elements are at play. What is a company to think about this notion that money leads to happiness? The following pages address that question before applying this conversation to a business context and considering pay equality between
3. As countries get richer, they tend to get happier” (as cited in Gomez-Mejia, Balkin, & Cardy, 2012). These new findings are based on a broad wealth of data that, as Stevenson and Wolfers argue, Easterlin did not have available 35 years ago. Since a Gallup Survey showed that respondents at a higher income level are likelier to call themselves happy than those near the poverty line, Stevenson and Wolfers make the conclusion that “absolute income matters,” that money does indeed lead to happiness. Gomez-Mejia, Balkin, and Cardy (2012) report that two British economists recommend policy goals that focus more on happiness than GDP in light of these findings while at the same time, Easterlin now capitulates his point to the new research findings. That said, he does maintain that money is not the sole reason behind happiness and other social policy elements are at play. What is a company to think about this notion that money leads to happiness? The following pages address that question before applying this conversation to a business context and considering pay equality between