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This paper is an attempt to test the hypothesis that utility depends on income relative to a 'comparison' or reference level. Using data on 5,000 British workers, it provides two findings. First, workers' reported satisfaction levels are shown to be inversely related to their comparison wage rates. Second, holding income constant, satisfaction levels are(More)
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We show that macroeconomic movements have strong effects on the happiness of nations. First, we find that there are clear microeconomic patterns in the psychological well-being levels of a quarter of a million randomly sampled Europeans and Americans from the 1970's to the 1990's. Happiness equations are monotonically increasing in income, and have a(More)
Modern macroeconomics textbooks rest upon the assumption of a social welfare function defined on inflation, π, and unemployment, U. 2 However, no formal evidence for the existence of such a function has been presented in the literature. 3 Although an optimal policy rule cannot be chosen unless the parameters of the presumed W(π, U) function are known, that(More)
This paper describes a statistical regularity or empirical 'law' of economics. Research done in the last few years has uncovered what seems to be a negatively-sloped curve linking the wages earned by employees to the unemployment rate in their region (or industry). The curve emerges from microeconometric earnings equations estimated on international data(More)
The paper suggests a new test for rent-sharing in the U.S. labor market. Using an unbalanced panel from the manufacturing sector, it shows that a rise in a sector's profitability leads after some years to an increase in the long-run level of wages in that sector. The paper controls for workers' characteristics, for industry fixed-effects, and for unionism.(More)
We present evidence that psychological well-being is U-shaped through life. A difficulty with research on this issue is that there are likely to be omitted cohort effects (earlier generations may have been born in, say, particularly good or bad times). First, using data on 500,000 randomly sampled Americans and West Europeans, the paper designs a test that(More)
  • Andrew J Oswald, Andrew Benito, Ed Butchart, Gaelle Pierre, Mark I Roberts, Simon Burgess +2 others
  • 1996
for helpful comments. Although I have not tried this paper's ideas on them, I have benefited from discussions over the years with Richard Layard and Steve Nickell. Abstract The paper conjectures that the high unemployment of the Western economies has been produced by the decline of the private house-rental market and the rise of home-ownership. Evidence is(More)
  • Andrew J Oswald, Kamal Birdi, Danny Blanchflower, Andrew Clark, Rafael Di, Tella +14 others
  • 1997
If a nation's economic performance improves, how much extra happiness does that buy its citizens? Most public debate assumes-without real evidence-that the answer is a lot. This paper examines the question by using information on well-being in Western countries. The data are of four kinds: on reported happiness, on reported life satisfaction, on reported(More)