You are here

By Ed Diener and Martin Seligman
February 2004

Domestic policy currently focuses only on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. Economic indicators alone were good first approximations to well-being when basic resources were very scarce. But in the absence of scarcity there is enormous slippage between economic indicators and the well-being of a nation. We have two projects in mind that we believe are urgent.

Well-Being and Domestic Public Policy

First we will examine how the following areas are related to life satisfaction, and describe policies that follow from the findings: societal characteristics, income, work life, health, and social relationships. In the second project we will create an optimum set of well-being indicators for nations and communities that can be used in combination with economic indicators by policy makers as well as the public, and explain in depth the rationale of these measures. The overarching goals of these projects are to redirect domestic policies so that they include well-being as a major goal, and to create a compelling, reliable, and valid set of indicators that can be used by governments and institutions.

Economic Indicators Are Not Enough

It is becoming increasingly clear that policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by considerations related to well-being, people's sense of purpose and satisfaction about their lives. Not only are well-being and purpose valuable in themselves, but they supplement shortcomings in the regnant economic indicators. For example, economic indicators have risen steeply over the past decades, and yet there has been no rise in life satisfaction during this period, and there has even been a substantial increase in depression and distrust of others. We believe that economic indicators were extremely important in the early stages of economic development when the fulfillment of basic needs was the central concern. However, as societies have grown wealthy, differences in well-being are less frequently due to income, and are more frequently due to factors such as social relationships, purpose in life, and enjoyable work. We aim to create a set of national indicators of well-being which will supplement and parallel the economic indices. Initial findings in the area of well-being have important policy implications that point to the importance of monitoring well-being before formulating policies. For example, there are important noneconomic predictors of the average levels of well-being of societies, such as social capital, democratic governance, and human rights. At the individual level, income appears to have a decreasing influence on well-being as incomes climb above a safety net level. In the workplace, work satisfaction and positive emotion at work have positive effects on the productivity and profitability of organizations.

The Importance of Social Capital

An area where economic indicators have been particularly blind is in showing the importance of social capital and social support to the positive functioning of society. Supportive, positive social relationships are necessary for well-being. In one study, for example, we found that not a single respondent who was extremely happy had poor social relationships. There are data that suggest that well-being follows from good social relationships and not merely vice-versa. For example, widows show a decline in life satisfaction when their husbands die and this decline persists for many years. But social capital, trust, volunteering, reciprocity and altruism are declining in America, even as economic indicators rise. This is very worrisome because societies that are lower in social capital have more crime and more corruption. Since positive social relationships are critical to well-being, a number of policy suggestions flow directly. For example, companies must be careful about frequently moving their employees geographically and society must do more to establish positive long-term relationships, by educating youth about marriage. Other important policy-relevant conclusions that are not captured by economic information emerge from well-being research. For example, religiosity is a consistent predictor of well-being, and our research shows that this is especially true for those who are encountering difficulties such as unemployment.

Needed: An Index of Well-Being

Desirable outcomes, even economic ones, are often caused by well-being rather than simply following from it, thus strengthening the case that a national well-being index is imperative. For example, people high in well-being later earn higher incomes and perform better at work. Happy workers are better organizational citizens and people high in well-being have better social relationships. For example, they are more likely to get married, stay married, and have rewarding marriages. Finally evidence is accumulating that people who are high in well-being are less likely to suffer from a number of physical ailments than those who are low in well-being. It might be that well-being is predictive of success in life because well-being follows from having purpose in life. In order to facilitate the use of well-being outcomes in policy, we need a standardized national well-being index that systematically assesses key well-being variables for representative samples. Several measures are essential, including positive and negative emotions, engagement, purpose and meaning, optimism and trust, and the broad construct of life satisfaction. A major problem with using current findings on well-being to guide policy is that they include widely different measures of different concepts, and on a haphazard mix of respondents. Thus, current findings provide an interesting sample of policy-related findings, but often do not offer a strong enough data base on which to base policies.

© Copyright 2004 Martin E. P. Seligman. All rights reserved.