Government Makes People Happy

New research from Benjamin Radcliffe indicates that countries with a larger role for government (within the developed world — his work does not extend to communist or developing countries) have happier citizens.  From an interview on the work with Dylan Matthews:

I have organized my research around two dimensions of policy. The first is the size of government, i.e. of what it is government does, from the tax burden to the generosity of the welfare state to the total impact of the government in terms of its overall consumption on GDP. The second involve institutions that protect people in labor markets, which means labor unions and economic regulations (the minimum wage, mandated vacation time, etc.), which provide  a degree of sovereignty and power for workers in their employment relationships. Two sides of the coin: the general scope of what government does to make life more secure for people and the stuff that works specifically in terms of peoples’ work conditions.

Both types of policies contribute to what social theorists call “decommodification,” meaning limiting the degree to which in a capitalist economy people have to act as commodities in order to survive. You have to sell your labor power on the market. Decommodification measures how much people can opt out of the labor market, whatever the reason, and provides a way of judging to what extent have we made them free of market commodification.

More decommodification makes people happier, and it does so for rich and poor people

I think Radcliffe’s conclusions are correct but question his rationale.  Other researchers have found that income correlates with happiness up to the point where people don’t have to worry where their next meal or rent payment is coming from.  Above that it makes little difference.  Countries with bigger welfare states ensure that fewer of their people are at the threshold of desperation.  And that makes those countries happier.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.