It's not the economy, stupid! How social capital and GDP relate to happiness over time

TL;DR

This study examines how social capital and GDP influence subjective well-being over time, revealing that social capital predicts long-term happiness trends while GDP's influence diminishes, confirming the Easterlin paradox.

Contribution

It provides empirical evidence on the differing impacts of social capital and GDP on happiness across short, medium, and long-term periods.

Findings

Social capital predicts long-term well-being trends.

GDP's correlation with happiness weakens over time.

Short-term GDP positively correlates with well-being, unlike in the long run.

Abstract

What predicts the evolution over time of subjective well-being? We correlate the trends of subjective well-being with the trends of social capital and/or GDP. We find that in the long and medium run social capital largely predicts the trends of subjective wellbeing in our sample of countries. In the short-term this relationship weakens. Indeed, in the short run, changes in social capital predict a much smaller portion of the changes in subjective well-being than over longer periods. GDP follows a reverse path, thus confirming the Easterlin paradox: in the short run GDP is more positively correlated to well-being than in the medium-term, while in the long run this correlation vanishes.