Work-Life Balance and Happiness

Prof. Andrew OswaldUniversity of Warwick

WBS Lecture

Economics is changing

Economics is changing

Researchers are studying mental wellbeing.

Economics is changing

Researchers are studying mental wellbeing.

We are drawing closer to psychology and medicine.

Could we perhaps learn how to …

make nations and prime ministers cheerier..?

or perhaps a whole organization…like a bank

… or a business school (even) happier?

Some good news to start:

Some good news to start:

In Western nations, most people are happy with their lives

The distribution of life-satisfaction levels among British people

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Self-rated Life Satisfaction

Source: BHPS, 1997-2003. N = 74,481

But the time trend is less encouraging.

Despite economic growth, there is evidence that society is not becoming happier.

For example

A simple graph to worry finance ministers all over the world:

Average Happiness and Real GDP per Capita for Repeated Cross-sections of Americans.

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Statistical methods

How is it possible to study happiness and mental wellbeing in a systematic way?

• activity in the brain’s pleasure centres• health, smiles, positive emotional arousal, and

future intentions

Self-reported happiness relates strongly to…….

☺

Pleasure centre: septal area of the hypothalamusAmygdala:

emotions

Brain Responses in Two Pictures(MRI Scans)

Source: Richard Davidson, University of Wisconsin

Reported happiness is correlated with…

• A person’s assessment of happiness by friends and family

• Person’s assessment of happiness by spouse

• Person’s recall of good and bad events• Heart rate and blood pressure response

to stress• The risk of getting coronary heart

disease

Typical GHQ mental-strain questions

Have you recently:

Lost much sleep over worry?Felt constantly under strain?Felt you could not overcome your difficulties?Been feeling unhappy and depressed?Been losing confidence in yourself?Been thinking of yourself as a worthless person?

Work and Jobs in Britain

What do the latest data show about strain and work-life balance?

In our country, GHQ mental strain levels appear to be worsening over time.

New Perspectives on Job GHQ stress scores, BHPS, 1991-2004

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1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

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Job satisfaction is trended down

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Average

Why?

• It is not because of increases in job insecurity.

• Instead, there seems to have been a noticeable rise in work intensity and tiredness.

ISSP international data on work-life balance

“If you could change the way you spend your time, how would you…?”

“… I would like to spend much more time with my family” (% workers)

USA 46% New Zealand 26%Great Britain 36% Switzerland 23%Sweden 32% Italy 21%Norway 27% Netherlands 18%Denmark 26% Japan 9%Canada 26% Spain 8%

Source: Blanchflower and Oswald (2000a) and Interna tional Social Survey Programme, 1997

New Perspectives on Job

This work-life balance problem is greatest among:

• The middle-aged• Those with high

educational qualifications• Men

There is some other evidence that our nation has a problem.

The proportion in the Labour Force Survey who report “depression, bad nerves or anxiety” is going up:

1998 0.9%2002 1.4%2006 1.7%

Prescriptions for anti-depressant drugs trebled between 1991 and 2003.

The UK’s ranking on job satisfaction

We rank below

Denmark SwedenNetherlands IrelandLuxembourg USAAustria New ZealandNorway SwitzerlandFinland Germany

New Perspectives on Job

A taste of well-being research (1)

Happiness is high among:

A taste of well-being research (1)

Happiness is high among:

WomenPeople with lots of friendsThe young and oldMarried and cohabiting peopleThe highly educatedThe healthyThose with high income

A taste of well-being research (2)

Happiness is particularly low among:

The unemployedNewly divorced and separated people

and children have no effect on happiness

Happiness is U-shaped through the life cycle

The pattern of a typical person’s happiness through life

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15-20 21-30 31-40 41-50 51-60 61-70Age group

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This holds in many settings

This holds in many settings

For example, we see the same age pattern in the probability of depression among a recent sample of 800,000 UK citizens:

[Blanchflower and Oswald, 2006]

New Perspectives on Job The probability of depression by ageMales, LFS data set 2004-2006

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1938 1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990

Year of birth

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New Perspectives on Job

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1942 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990

Depression by age among females: LFS data 2004-2006Q2

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In passing

In this data set, the probability of depression is lower among the better educated.

Now what about money?

Now what about money?

The data show that richer people are happier and healthier.

In the literature, one broad feature is striking:

The state of the mind determines the health of the body

The state of the mind determines the health of the body

Those with high status live longer(being promoted seems more important than a healthy diet and exercise)

Married people are healthier (marriage offsets smoking)

To the gentlemen:

To the gentlemen:

If you must smoke,

To the gentlemen:

If you must smoke,

it is essential to get married.

Another intriguing feature of the data:

Humans are adaptive.

They have amazing resilience: eg. to(i) divorce(ii) disability.

Comparing two years before divorce to two years after, there is marked improvement in psychological health.

We use a GHQ mental strain score.

Divorce eventually makes people happier

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Data Source: BHPS

Mean GHQ Mental Stress LevelsLead−Lag Analysis for Marital Transitions

Human beings also bounce back remarkably from, say, disability.

However, there is also a downside to that emotional adaptability

However, there is also a downside to that emotional adaptability

What about happiness in whole countries?

When a nation is poor, extra riches will raise happiness.

When a nation is poor, extra riches will raise happiness.

Say we look at a scatter plot across many countries:

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2000 5000 10000 20000 35000 60000GDP per capita in US$ at PPP (log scale)

Life Satisfaction = -0.9 + 0.8 * Log GDP (t=8.3)World Values Survey

Life Satisfaction and GDP Per Capita

Yet

• Growth in income is now not correlated with growth in happiness

• This is the “Easterlin paradox”

Well-being is flat through time in lots of rich countries

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1973 1977 1980 1983 1986 1988 1990 1993 1996 2000 2004

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In the USA, real income levels have risen six-fold over 100 years but:

Year 1900 Suicide rate = 10 in 100,000 people

Year 2005 Suicide rate = 10 in 100,000 people

In the USA, both job satisfaction (scale 1-4) and happiness (scale 1-3) have been flat since 1972

New Perspectives on Job

New Perspectives on Job Figure 7. Job Satisfaction and Happiness, USA (General Social Surveys)

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1972 1976 1980 1984 1988 1992 1996 2000 2004

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Job satisfactionHappiness

Are there diminishing returns to real income?

Very probably yes.

Source: World Values Survey, 1995

1995/2000 World Values Survey resultsLife Satisfaction

World Values Survey

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the western countries

Similar results within a nation(though cardinality questionable)

Take American families in 1994 for example

So what exactly goes wrong when a wealthy country gets richer?

We are not certain, but..

Some clues…

• Social comparison (you compare your 3 BMWs to people with 3 BMWs)

• Habituation: people adapt to money

• Mistaken choices (long commutes and working hours)

Social Comparisons

Producing a happier society?

Possible ideas

• Envy and social comparisons are counter-productive at the aggregate level

• Some argue for a ‘ corrective tax ’ system –one that reduces work effort to a level where the fruitless incentive to raise your relative income has been fully offset (Frank and Layard)

• In terms of positional goods, e.g. luxury cars – could be taxed much more

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Another difficulty: Long working hours in the EU

Graph 1: % of employees working over 45 hours per w eek

Source: European Working Conditions Survey, 2000

Practical points

• Commuting takes a severe toll on people.

• A coordinated slowing-down would be valuable.

• Giving employees as much autonomy as possible is beneficial.

Summing up

Given our current real income levels:

Summing up

Given our current real income levels:

Growth is not making the industrialized nations happier.

There does seem evidence of a genuine work-life balance problem in modern society.

One natural conclusion

Policy in the coming century will need to concentrate on non-materialistic goals.

One natural conclusion

Policy in the coming century will need to concentrate on non-materialistic goals.

GNH not GNP.

Thank you for coming

Work-Life Balance and Happiness

Papers downloadable at www.andrewoswald.com

I here owe a great debt to the work of David G Blanchflower, Paul Frijters, Nick Powdthavee, and Justin Wolfers