A secure job, a home of your own, and more money (particularly for low-income households) are all key drivers of higher well-being, and should therefore be prioritised by policy makers, according to a new report published today (Wednesday) by the Resolution Foundation.
Happy now? examines subjective well-being across the country to assess the drivers of higher – and lower – well-being, and what lessons this might hold for policy makers that want to go beyond the pounds and pence of GDP as a target for economic policy.
The report finds that the most important determinants of well-being are having good health, a job and a partner, but that levels of well-being also vary significantly depending on someone’s age, income level, housing tenure, and where they live.
For example, the report finds that well-being levels – which include happiness, life satisfaction, self-worth and lack of anxiety – generally fall between someone’s mid-20s and early 50s, and then start rising again until people reach their 70s. On the basis of age alone, says the Foundation, the key to happiness is to be 16 or 70.
The Foundation notes that for policy makers who want to boost well-being, what really matters is what drives those improvements. The report finds a strong relationship between many traditional economic metrics and well-being, and shows that:
Incomes matter, but have diminishing returns. Higher-income households unsurprisingly report higher well-being. However, the relationship between income and well-being is not linear – an extra £1,000 of income delivers a far greater well-being boost to a household with £10,000, compared to one with £100,000. This might reinforce the case for redistributive policies, says the Foundation.
Jobs matter. Workers enjoy higher well-being than unemployed or economically inactive people, while the negative well-being change associated with losing a job is bigger than the positive change associated with finding one. The report notes too that permanent contracts and control of working hours are also associated with higher well-being, suggesting that quantity and quality matter when it comes to work.
Homes matter. Home ownership is associated with higher well-being than private or social renting, even after controlling for factors such as income and age. This reinforces the need to improve conditions and security for the record number of renters who can’t afford to own, and policy makers’ existing choice to support higher home ownership, says the Foundation.
How you live, and where you live, matter. Having good health is the most significant determinant of well-being – reinforcing policy makers’ focus on the NHS as a spending priority – while people in Northern Ireland report having the highest well-being in the UK.
The Foundation says that the importance of stronger income growth, higher employment, better jobs and increasing home ownership in boosting well-being reinforce the need for policy makers to focus on these issues.
It adds that while it has become fashionable for some social scientists to say that well-being should replace core economic metrics such as GDP growth, the evidence shows that that it is a complement to, rather than a replacement for, a focus on economic growth, housing, employment and pay.
George Bangham, Research and Policy Analyst at the Resolution Foundation, said:
“Well-being matters to all of us, and yet we’ve only recently started to collect serious data on how happy people are with their lives.
“This important data shows that there is more to life than a country’s GDP, but that the employment and income trends that lie behind our economy can make a big difference to our well-being too.
“It is encouraging that a growing number of policy makers are interested in boosting well-being. But their focus on the new objective should complement, rather than replace, priorities such as income redistribution, better jobs and secure housing.
“The evidence suggests that these core economic policies are effective ways to raise well-being.”