Economic growth in China has not meant greater life satisfaction for Chinese people: long-term study

May 14, 2012, University of Southern California

Despite an unprecedented rate of economic growth, Chinese people are less happy overall than they were two decades ago, reveals timely new research from economist Richard Easterlin, one of the founders of the field of "happiness economics" and namesake of the Easterlin Paradox.

In 1990, at the beginning of China's economic transformation, a large majority of Chinese people across age, education, income levels, and regions reported high levels of life satisfaction. Sixty-eight percent of those in the wealthiest income bracket and 65 percent of those in the poorest income bracket reported high levels of satisfaction in 1990.

But life satisfaction has fallen dramatically among the poorest Chinese in the last two decades, according to the study, reflecting a growing unease about emplyment prospects and the dissolution of the social safety net.

Despite happiness parity just twenty years ago, the percentage of the poorest Chinese who say they are satisfied with their lives has fallen more than 23 percentage points. Only 42 percent of Chinese people in the lowest income bracket reported high levels of life satisfaction in 2010, while, at the same time, the percentage of the wealthiest Chinese who said they were satisfied with their lives grew about 3 percentage points, to 71 percent.

The paper, appearing the week of May 14 in the , comes on the heels of the revelation that the Chinese government has not released an official report about wealth distribution in the country in more than a decade.

"There are many who believe that well-being is increased by , and that the faster the growth, the happier people are. There could hardly be a better country than China to test these expectations," said Easterlin, University Professor and Professor of Economics at the University of Southern California.

"But there is no evidence of a marked increase in life satisfaction in China of the magnitude that might have been expected due to the enormous multiplication in per capita consumption," Easterlin said. "Indeed people are slightly less happy overall, and China has gone from being one of the most egalitarian countries in the world in terms of life satisfaction to one of the least."

Overall, life satisfaction among Chinese fell sharply in the early 1990s, bottomed out in the 2000s and has since recovered to about the same or slightly lower levels of individual happiness — despite the largest period of economic growth in history and a quadrupling of China's GDP per capita. The analysis uses a wide range of data sets on self-reported life satisfaction and is the first to track happiness trends in China over a long period (from 1990 to 2010) rather than using simple comparisons of points in time.

The overall downward trajectory in life satisfaction among low-income people in China, the most populous country in the world, is similar to observed trends in the transition countries of central and eastern Europe, and in both areas reflects the emergence of substantial unemployment and the dissolution of the net, correlating to declining satisfaction in particular areas of life such as household finances and health.

On one of the surveys included in the latest PNAS analysis, people in China were asked a general question about how they viewed their own health. In 1990, a majority of Chinese people in both the wealthiest bracket and the poorest bracket rated their health as "good" or "very good" — with only a four percentage point divide across income levels. By 2007, the divide in perception about personal health had grown to 28 points, driven by a decline in self-reported health among the poorest Chinese and an increase among the wealthiest.

"One may reasonably ask how it is possible for life satisfaction not to improve in the face of such dramatic per capita economic growth," said Easterlin, a member of the National Academy of Sciences and the American Academy of Arts and Sciences. "There is more to life satisfaction than material goods, and there is an important policy lesson here for the and policymakers generally: among ordinary Chinese people, especially the less educated and lower-income, jobs and income security, reliable and affordable health care, and provision for children and the elderly, are of critical importance to ."

Explore further: Over long haul, money doesn't buy happiness: 'Easterlin Paradox' revisited

More information: “China’s life satisfaction, 1990–2010,” by Richard A. Easterlin, Robson Morgan, Malgorzata Switek, and Fei Wang, PNAS, 2012.

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2.3 / 5 (6) May 14, 2012
Hmmm. Lets see. In 1990 Chinese were satisfied ....

"The protests of 1989 resulted in the massacre of Chinese protesters in the streets to the west of the square and adjacent areas."

The question is, were they satisfied about being massacred or were they terrified about telling anyone they were terrified about being massacred?
5 / 5 (2) May 14, 2012
Of some reason, the movie Matrix came to my mind from this article. People are happy in China, because they are protected from the reality by The Great Wall of Internet.
1 / 5 (2) May 15, 2012
Makes sense when you consider other factors than wealth itself. Uncertainity for the future and no guarantee of safety net will make even wealthier people unhappy. On the other hand, iron rice bowl, even if it is a small bowl, led to internal peace and happiness.

The solution is to reintroduce the safety net, now that China can actually afford it.
3 / 5 (6) May 15, 2012
define economic growth.
not rated yet May 15, 2012
So there has been great economic growth for China as a country. However, per household, it is still one of the poorest countries on Earth. So the cost of goods has increased and their people are poor. I think equation is simple to understand!

China has a little over 3X the number of people as the U.S. Our GDP is ~$16 trillion. Their GDP was, $3 trillion (somewhere in there). To live like the U.S., they would need a GDP of ~$48 trillion! They're a little off.
1.7 / 5 (6) May 15, 2012
China's GDP per capita has risen 100% from 2001 to 2010.
US GDP per capita has gone up 30% in the same period. (And I suspect it has dropped since 2008)
not rated yet May 15, 2012
the poor that subsequently relates to the uneducated will never be happy because they lack the drive to perform at a higher level. as the population is restructured that only the intelligent and vigorous are rewarded the stats will change. all societies should be considering this as the means to an end.
3 / 5 (2) May 15, 2012
China is learning that material wealth - beyond what is necessary - does not being happiness.

Ownership demands maintenance in order to combat entropy. What you think you own ends up owning you.

Less Stuff = More Happiness is the general rule.

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