Will Earning More Make You Happier?

So, will it? Will making more money make you happier? I've addressed the money/happiness issue before, and now there's a piece from Career Journal on the subject. They say "not necessarily" does money make you happier, quoting a recent study in Science magazine. Their main argument supporting this position on the relationship between money and happiness:

61% of people earning less than $20,000 a year report being "pretty happy" compared to about 52% whose annual income exceeds $90,000.

Ok, that's the media using misleading stats if I've ever seen it.

"Pretty happy" is the middle level in the survey they quote ("Very happy" is the highest and "Not too happy" is the lowest). While their numbers above are true, they don't give a complete picture of what's going on. For instance, consider these facts from the same study:

• 22% of people earning less than $20,000 a year report being "very happy" compared to about 43% whose annual income exceeds $90,000.

• When you take both "very happy" and "pretty happy" results, 94% of people whose annual income exceeds $90,000 fall into one of these two categories versus only 83% of people earning less than $20,000 a year.

• 17% of people earning less than $20,000 a year report being "not too happy" compared to 5% whose annual income exceeds $90,000.

• The numbers get closer the more you move up the income scale. Generally, the $20,000-$49,999 group is happier than the below $20,000 group and the $50,000-$89,999 is happier still (so much so that this latter groups numbers are similar to the exceeds $90,000 group.)

Looking at this, I conclude that people who make more are happier, though as they make more and more, the increase in happiness is less and less. In other words, once people make a decent salary, making more does result in them being happier, but not dramatically happier.

Now, whether making more is actually the cause of this happiness or not, that's up for debate.

I'd be interested in knowing what you think. My two cents is that people who earn more, up to a point, are happier because they do earn more. Whether this is because they get to buy more "stuff" or have more financial peace of mind, I can't say. But my guess would be that happiness is related to the amount a person earns. (BTW, I would guess that net worth is even more related to happiness than income, but again, this is just a guess.)

Comments

[K.M.]

I also wonder if someone's overall happiness can influence how much they make. For instance, happy, optimistic people may make better leaders. They may go after ambitious jobs or careers that someone with a more passive or depressive approach would skip (too hard, too much work, I'll never make it anyway). They may take more risks that pay off, or ask for more...since, with a high opinion of themselves, they feel they deserve more.