Chapter 16: Work and Happiness

I feel like I am dwelling too much on this topic, but at the same time I realise that I have barely scratched the surface of the study of happiness. A more thorough analysis would require a series of books on its own, and even then we would only have an incomplete picture. In this book – as I mentioned before – I decided to focus the attention on the how happiness related to income, and more importantly to employment, since this is the main topic of discussion. As we have seen, research shows that there is a correlation between income and general well-being (albeit fairly complicated and multifaceted), but it is unclear if there is a causation, and if so, which way does it go? We know that happier people are generally richer than the average, but we also know that happy people are less stressed, more sociable, more productive, and therefore more successful. So what is causing what exactly? The problem of reverse causation and selection bias is a serious one. People who are generally lonely and unhappy tend to be dismissed when looking for a job, they are more likely to become unemployed and to stay unemployed.

Then there is another question. Would people be just as happy if they had the same income, but without having to work? Maybe it's not work itself that matters, but what it represents: Access. Access to a good house, medical care, vacations with their families, movies with friends.…What if all those things were provided for, would they be just as happy?

The answer is a resounding..."NO!" You didn't expect that, did you? You thought I was going to say that if we gave people enough money or access to what they need they wouldn't have to worry about petty little things and could finally concentrate on what really matters in their lives, which will make them happier. It turns out that just giving people money is not enough. We know that because people with full unemployment benefits were reportedly less happy than those who were employed, with otherwise similar characterises (controlling for other variables). Work does matter, after all.

Unemployment plays such a big role in our happiness that is hard to dismiss it with a few sentences. Many studies have found, in many countries and many time periods, that personally experiencing unemployment makes people very unhappy.1 In their ground-breaking study of Britain, Clark and Oswald summarise their result as follows: “joblessness depressed well-being more than any other single characteristic, including important negative ones such as divorce and separation”.2 Great Scott! More then divorce and separation? Is being employed such a powerful force in determining our general well-being? Apparently, it is.

A while back we pondered about the possibility of reverse causation due to a selection bias in the income determination, could there be the same problem with employment? In other words, is unemployment causing unhappiness, or is it the other way round? Many studies with longitudinal data gathered before and after particular workers lost their jobs, suggest that there is evidence that unhappy people do indeed perform poorly on the labour market, but the main causation seems clearly to run from unemployment to unhappiness.3 Other studies in social psychology also come to similar conclusions.4

Let?s stop for a moment and look at what we have discovered so far. Happiness is really complex, but we are beginning to understand it, and we certainly know more now than we did 20 years ago. We know that genetic, personal (stable partner, family, mental and physical health, good education) and social factors (democratic participation, sense of community) play a major role. We know that we are very bad at predicting our future happiness, as we tend to overestimate the effect that supposedly major events will have in the long term. We know that the memories of our experiences are distorted by our mind, and that we can be easily fooled. We know that we adapt to almost anything, with very few exceptions (noise, cosmetic surgery5). We know that it is hard to step off the hedonic treadmill. We know that happiness is relative, as we tend to compare ourselves with those around us. We know that income does matter for our life satisfaction (in a log scale), but only up to a certain level for our emotional happiness (about $75,000). Most importantly, we know that being employed is crucial to our general well-being.

If working is so important, and we are about to experience massive unemployment, then we are in for some very big problems. Unemployment leads to depression, anxiety, loss of self-esteem and of personal control. Numerous studies have established that unemployed people are in worse mental and physical health than employed people.6 As if that was not enough, they also have a greater tendency to consume large quantities of alcohol, their personal relationships are more strained, they have a higher death rate, and are also more likely to commit suicide. Just to put things into perspective, a 1-percentage-point increase in State unemployment rates in the United States for 1972-1991 predicts an increase of suicides by 1.3%7. Now, try to picture what a 25 or 30% unemployment rate is going to produce. It doesn't look pretty, does it?

At this point, it would appear that we have no way out. On one side we know that the profit-based market system requires an increase in productivity, which is achieved by automation. We have seen how that could play out – technology advances exponentially but our cultural adaptation does not. As a result, millions could be out of a job very soon, and only a few of them will be quick enough to learn new skills to find alternative employment. On the other side, we know that even if we find a way to provide for the unemployed, they will still live pretty miserable lives.

What should we do? Should we get creative and find them meaningless jobs, that serve the purpose of giving them the illusion of being helpful (even though they are really doing nothing productive)? Should we stop automation by enforcing laws to prevent the collapse of the system? Bear in mind that this solution would only work for jobs in the public sector, because corporations know no boundaries, and could not afford to operate at sub-optimal levels of efficiency for long in the global market. So should the states (most of which are broke already) somehow try to hire and pay millions of superfluous workers, in order to prevent widespread depression, suicides, and other collateral effects?

Before I continue with my wild and ridiculous mental projections, it may be wiser to ask ourselves “Why?”. Why does unemployment have such disastrous consequences? Why do people have to work in order to be happy? What is so special about working?

Social norms greatly affect the subjective well-being of people, and this is particularly prominent among the unemployed.8 If the social norm is to have a job, those who do not feel alienated and ashamed are constantly plagued by a feeling of inferiority. We know how significant that is, given that we tend to always compare our achievements to those of others.

Interestingly enough, this has also another unexpected consequence. The unemployed report to feel less miserable if they are surrounded by a majority of unemployed, as confirmed by many studies.9 Somewhat paradoxically, a high level of unemployment will be very detrimental the people’s well-being, but a significantly higher level would not be as bad. Before jumping to the conclusion that we should not worry too much about the future, consider the amount of pain and suffering that people will experience in-between phases. Also, what kind of society would that be? Remember that the reason unemployed people’s happiness rises is because:

They adapt to their new situation, they lower their standards, their expectations, their dreams.
As it becomes the norm, the general culture of that society moves along with it, people lose purpose, and instead of being unhappy and miserable by themselves, they are slightly less unhappy and miserable together.

I don't know about you, but I wouldn't want to live in this kind of society. I shiver at the thought that this could represent the soon-to-be destiny of our species.

There has to be another way.

1.1 Flow

“Choose a job you love and you will never have to work a day in your life.”

– Confucius

The concept of flow was proposed by psychologist Mihály Csíkszentmihályi, and represents the mental state of operation in which a person in an activity is fully immersed in a feeling of energised focus, full involvement, and success in the process of the activity. It is a single-minded immersion and it is perhaps the ultimate in harnessing emotions in the service of performing and learning. In flow, the emotions are not just contained and channeled, but positive, energised, and aligned with the task at hand.10

“The ‘me’ disappears during flow, and the ‘I’ takes over. A rock climber in an early study of flow put it this way: ‘You’re so involved in what you’re doing you aren’t thinking about yourself as separate from the immediate activity. You’re no longer a participant observer, only a participant. You’re moving in harmony with something else you’re part of’. Flow is a subjective state that people report when they are completely involved in something to the point of forgetting time, fatigue, and everything else but the activity itself. it's what we feel when we read a well-crafted novel or play a good game of squash, or take part in a stimulating conversation. Mark Strand, former Poet Laureate of the United States, described this state while writing as follows:”11

You’re right in the work, you lose your sense of time, you’re completely enraptured, you’re completely caught up in what you are doing…When you are working on something and you are working well, you have the feeling that there’s no other way of saying what you’re saying.

Social norms, adaptation, income, and relative comparison do not fully explain why work makes us live more fulfilling lives. We know this because studies have shown that the self-employed are happier, even if they are working longer hours and/or making less money.12 The same goes for voluntary workers, giving their hearts and minds to the non-profit world.13 These people are not only working on something they enjoy doing, but also receive even more gratification through the act of helping others.

Another interesting observation comes from looking at the number of hours worked annually by a person against the average life evaluation.


Figure 1.1: Life evaluation against working hours in OECD countries (2009). On the y-axis is percentage of people thriving, on the x-axis the average annual hours actually worked per worker. Happiness data comes from the Gallup World Poll 2005-2009 and working hours from the official OECD library. For a interactive version of the graph visit click here

As we can see from Figure 1.1,14 15 people who live in countries where they work less are consistently happier than those who work longer hours. Take Denmark as an example. It comes out on every poll as one of the happiest place on earth and as much as 82% of the population report to be ‘thriving’ (well-rested, respected, free of pain and intellectually engaged), yet they only work 1,559 hours annually, 200 hours less than the average of all OECD countries. Compare it now with South Korea, where people work 2,232 hours, 473 hours more than the average, and only 28% of them thrive. The same pattens can be observed all over: in countries where the workweek is shorter (Sweden, Finland, Norway, The Netherlands) people thrive; in countries with more working hours (Greece, Poland, Hungary, Russia, Turkey) people are more miserable.

There is an underlying principle at work that goes beyond societies? expectations, status and class, or the income they generate. Independence, self-determination, freedom, the ability to follow our dreams, the feeling of creating positive change, being in a state of constant flow. This is what drives us. This is the difference between living by the day with no particular thrills, and exploding with energy, living the days to their fullest, savouring every moment, making them exciting and indispensable. To make a difference, to transcend our condition, to help others, to create new things that nobody could ever dream of doing, to go where no one has gone before.

Drive, flow, purpose. Work is merely an enabler of these conditions, not a requirement.


1For a survey, see Darity and Goldsmith, 1996. Bjorklund and Eriksson (1998) and Korpi (1997) provide evidence for Scandinavian countries, Blanchflower and Oswald (2004b) for the United Kingdom and the United States, Winkelmann and Winkelmann (1998) for Germany, and Ravallion and Lokshin (2001) for Russia.

2Unhappiness and Unemployment, Andrew E. Clark and Andrew J. Oswald, 1994. The Economic Journal Vol. 104, No. 424 (May, 1994). pp. 648-659.

3See, e.g., Winkelmann and Winkelmann 1998 for German panel data, or Marks and Fleming (1999) for Australian panel data, the latter considering in detail various effects on mental health.

4For a survey, see Murphy and Athanasou (1999).

5“There are some very interesting exceptions. For instance, we do not get used to noise. A lot of research suggests that if your environment is noisy, for example they are doing construction around you, you can not get used to it. Your happiness drops and it does not come back up. Your system cannot habituate to continued noise. We adapt to good things, winning the lottery, winning a prize, getting an ‘A’ in a course. We adapt, we get used to it, also with some surprising exceptions. One of the other surprises from happiness research is the effects of cosmetic surgery like breast enhancement and breast reduction. One of the big surprises is it makes people happier and they stay happier. And one explanation for this is how we look is very important. It is very important for how other people see us and how we see ourselves, and you never just get used to looking a certain way. So, if you look better it just makes you happier all the time.” – Psychology 110 Lecture 20 - The Good Life: Happiness, prof. Paul Bloom. Yale University.

6Veum Goldsmith and Darity (1996).

7Ruhm (2000).

8Stutzer and Lalive (2004).

9Clark and Oswald (1994).

10Handbook of Positive Psychology, Jeanne Nakamura and Mihály Csíkszentmihályi, 2001. pp.89-101.

11Handbook of competence and motivation, Mihály Csíkszentmihályi, Sami Abuhamdeh, and Jeanne Nakamura, 2005. Chapter 32 – Flow.

12Bruno S. Frey (2008), Hamilton (2000), Ryan and Deci (2000).

13Meier and Stutzer (2008).

14Table: The World’s Happiest Countries, 2010. Time Magazine.

15Average annual hours actually worked per worker. OECD library, Organisation for Economic Co-operation and Development.

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