| Abstract: |
This paper shows that within-country happiness inequality has fallen in the
majority of countries that have experienced positive income growth over the
last forty years, in particular in developed countries. This new stylized fact
comes as an addition to the Easterlin paradox, which states that the time
trend in average happiness is flat during episodes of long-run income growth.
This mean-preserving declining spread in happiness comes about via falls in
both the share of individuals who declare low and high levels of happiness.
Rising income inequality moderates the fall in happiness inequality, and may
even reverse it after some point, for example in the US starting in the 1990s.
Hence, if raising the income of all does not raise the happiness of all, it
will at least harmonize the happiness of all, providing that income inequality
does not grow too much. Behind the veil of ignorance, lower happiness
inequality would certainly be considered as attractive by risk-averse
individuals. |