The inequality of happiness

On Friday the Office for National Statistics (ONS) will publish its latest GDP estimates, which many economists expect to show a marked improvement in UK growth. Not so very long ago an orthodox, if not unarguable, view was that improved growth data also signalled a similar pattern in national well-being.

But today concerns about the accuracy of GDP are being brought into official purview by work such as the ONS’ Measuring National Well-being programme (MNW), which today releases new data on personal life satisfaction for 2012-13. This turn towards wider measures of well-being as objects of statistical enquiry does not mean we are now beyond GDP, but it does provide an opportunity to think about ‘GDP and beyond’.

These questions are not new, of course. Economists have long recognised that the narrow pursuit of growth incentivises activities which, while officially registering progress, can generate harmful consequences or ‘externalities’ in other areas of life. However, in the context of recession these questions have assumed a special salience. As policy makers have struggled to deliver growth in GDP, progress – as officially measured – has been on hold.

Today’s release by the ONS is only one part of an ambitious programme measuring all of the factors contributing to well-being. But it is the first release by the ONS exploring the regional variation in personal well-being across the UK.

The aggregate picture from the survey is more positive than you might expect. Modest improvements are found across measures of life satisfaction, sense of worthwhile and anxiety compared with 2011-12. While Scotland has the largest proportion of people reporting very low levels of anxiety, Northern Ireland enjoys the largest proportion of people reporting very high levels of life satisfaction, worthwhile and happiness. Across the four indicators measured by the ONS one finds high levels of low personal well-being in Wales.

We can begin to explain this variation by reference to more traditional indicators such as GVA, a measure of economic output in different regions and places, or labour market statistics such as unemployment.

Given what we know about the damaging impacts of unemployment on mental health and subjective well-being, we would assume that this could tell us something about the high proportion of people in Wales reporting low levels of life satisfaction – the country’s unemployment rate is currently the highest in the UK. But as the ONS note, standard economic indicators can’t explain all the variation in the 2012-13 study. Despite the fact that England enjoys the highest GVA per head in the UK its average personal well-being ratings across the ONS’ measures are very low.

The UK has an uneven economic geography and there is now significant concern about the long-term impacts of spatial inequality between the English regions. Today’s ONS release confirms a picture of the South East pulling away from the rest of the UK, reporting high average levels of personal well-being.

While the North East reported disproportionately low levels of personal well-being across indicators such as life satisfaction and sense of worthwhile, the ONS highlights higher than average levels of anxiety and poor ratings of life satisfaction in London. These findings reflect the economic disadvantage of many regions outside of the South East. Although London performs strongly as a region across a suite of economic indicators, sub-regional variation between its many different areas are also strongly pronounced.

So rather than demonstrate our post-crisis age is one moving ‘beyond GDP’, today’s figures and others from the MNW programme give reason to think that growth remains vital if not sufficient to national well-being and prosperity.

The question is: where is growth generated and how it is shared? The equivalence between the UK’s economic imbalances and its reported levels of well-being can’t tell us everything about what would make the nation happier. But it indicates that addressing these inequalities would go a good way to promoting well-being in the future. That’s something keep in mind when looking at Friday’s GDP figures.