The World Happiness Report Explains What Makes People Happy

I'm posting the full article from this Fast Company piece on a new World Happiness Report.  The piece summarizes the results of the report and if you read anything on happiness these shouldn't come as a surprise to you.

Via the Fast Company article here


Happiness isn’t easy to quantify, but a lot of people have tried: Bhutan has its Gross National Happiness survey, global research company Ipsos has its annual world happiness poll, and now Columbia University’s Earth Institute has put out the first World Happiness Report, which has the ambitious goal of surveying the state of happiness in the world today and looking at how the science of happiness plays into it.

The report, commissioned by the United Nations Conference on Happiness (yes, that exists), contains over a hundred pages of musings on world happiness. Here’s an ultra-abridged version of the findings.

• Richer people are happier than poorer people on average, but wealth is only one factor in overall happiness. The same goes for countries, where factors like personal freedom, lack of corruption, and social support are more important.
• Unemployment obviously reduces happiness, but not because of what you may think. It’s not the loss of income, but the loss of things like self-esteem and workplace social life that lead to a drop in happiness. High unemployment rates can trigger unhappiness even in the employed, who suddenly become fearful of losing their jobs. According to the study, even low-quality jobs yield more satisfaction than being unemployed.
• In some countries, the self-employed report higher levels of job satisfaction than the employed. The study found a positive correlation between happiness and self-employment in both American and European data, but not in Latin America. The possible reason: Self-employment may be a necessity in developing countries where formal employment is not as readily available. When it’s not a choice, it doesn’t lead to happiness.
• Higher living standards correspond with increased happiness in some countries, but not all. In the U.S., for example, happiness levels have remained stagnant while living standards have risen over the past 50 years or so.
• Levels of trust (i.e. whether you think someone would return a cash-stuffed wallet) have fallen dramatically over time in certain countries--including the U.S. and U.K.--but risen in others, like Denmark and Italy. One explanation may be that overall life satisfaction has dropped in the former countries, but has risen in many continental European countries.
• Lack of perceived equality can reduce happiness. The report explains: "The most positive results are in an interesting time-series study using both the U.S. General Social Survey and Eurobarometer. This finds that in both the U.S. and Europe increases in inequality have (other things equal) produced reductions in happiness. The effect has been stronger in Europe than in the U.S. This difference probably reflects ideological differences: Some 70% of Americans believe that the poor have a chance of escaping poverty, compared with only 40% of Europeans."
• Mental health is the biggest contributing factor to happiness in all countries, but only a quarter of mentally ill people get sufficient treatment in the most developed nations.
• Married people across the world (studies have been done in the U.S., EU countries, Switzerland, Latin America, Russia, Eastern Europe, and Asia) claim that they’re happier than single counterparts. A stable family life also contributes to happiness.

It’s not hard to conclude from these findings that gross domestic product is not the ultimate indicator of happiness.


The report sums it up well:


"GDP is important but not all that is important. This is especially true in developed countries, where most or all of the population has living standards far above basic material needs. Except in the very poorest countries happiness varies more with the quality of human relationships than with income. And in the richest countries it is essential not to subordinate the happiness of the people to the 'interests of the economy,' since the marginal utility of income is low when income is so high. The economy exists to serve the people, not vice versa. Incremental gains in income in a rich country may be much less beneficial to the population than steps to ensure the vibrancy of local communities or better mental health. "


Check out the whole report here (PDF).

How to Raise a Financial Wizard

Ron Lieber column writer for the NYT had a recent article where he probed behind the parents of a couple young finance writers.  How to Be Richer, Smarter, and Better-Looking Than Your Parents by Zac Bissonnette and Ramit Sethi, the author of I Will Teach You to Be Rich.

With catchy titles such as these, parents are bound to scoop up these books full of common sense financial practices.  So how did these authors turn out to be these semi-financial gurus?  Lieber went to ask their parents.

According to Lieber "there were no compound-interest workbooks in any of their homes. Nor was there reading aloud from credit card terms or “The Millionaire Next Door.” But all of the offspring had a visceral memory of a habit or tactic they learned from their parents, which formed the foundation for the advice they give to other young adults today."

Dream New Dreams

It's hard to imagine that it has been nearly 4 years inspirational professor Randy Pausch passed away.  While watching the news last night ABC I saw this piece in which Diane Swayer interviewed Pausch's wife Jai.

Jai Pausch, who has recently remarried has written her own book, Dream New Dreams, Reimagining My Life After Loss.  In it she details the life of being a caregiver to her dying husband.

In the interview with Swayer, Jai Pausch discusses her fears that when Randy would finally pass the magic would be gone.  However she goes onto say that the magic didn't die when Randy passed but that there was magic within her.

Achieving your Dreams was the lasting lesson taught by Randy Pausch.  It's part of the reason why I named the firm DreamWorks



Here is the Last Lecture, "Really Achieving Your Childhood Dream" by Randy Pausch

Education Slowdown Threatens U.S.

People are thinking twice about going after that college degree.  Just about every generation has had a higher level of education than the previous.  Up until now.


With student loan debt spiraling out of control and jobs at a premium people are asking themselves if that college degree is worth it.  Study after study will tell you that people with a college degree make more than those that don't and that the unemployment rate is higher for those without a college degree.


However people are taking a serious look at the risk that college degree carries and with good reason.  As this WSJ article points out young people see recent college grads struggling to find a job and pay off on average $20k to $25k in student loan debt.  To some it is not a risk worth taking.


To some degree employers are still more concerned about where someone went to school rather than can they actually perform the job.  I've long contended that a college degree is merely a ticket that gets you into the dance.  Without that ticket some opportunities will simply not reveal themselves.


Via the WSJ article

• When baby boomers born in 1955 reached age 30, they had about two years more schooling than their parents, according to Harvard University economists Claudia Goldin and Lawrence Katz, who have calculated the average years of schooling for native-born Americans back to 1876.
• "Not all bachelor's degrees are the same," Georgetown University's Center on Education and the Workforce said in an extensive analysis issued last year. "While going to college is undoubtedly a wise decision, what you take while you're there matters a lot, too."
• There is a limit to how much schooling a person can get and to how many Americans have both the ability and interest in a four-year college degree. But the U.S. is nowhere near that point.
• Twenty countries have higher high-school graduation rates than the U.S.—including Slovenia, Finland, Japan, the U.K. and South Korea, according to the Organization for Economic Cooperation and Development. In the U.S., about one in five ninth-graders drop out before getting a diploma.
• About 30% of American adults have four-year college degrees, and there is little evidence that is a natural ceiling. Thirty years ago, the U.S. led the world in the percentage of 25- to 34-year-olds with the equivalent of at least a two-year degree; only Canada and Israel were close. As of 2009, the U.S. lagged behind 14 other developed countries, the OECD says.
• While not every college grad does better in the job market, statistics consistently show that, on average, the more educated the worker, the better he or she fares in today's job market. For example, 54% of high-school graduates over age 25 were working in March, the Labor Department says, while the rest were either looking for work or out of the labor force altogether. Among those with some college, 64% were working while 73% of those with a bachelor's degree or more were working.
• The fraction of 25- to 29-year-old men who had earned four-year degrees began a two-decade-long slide around 1975. After that, fewer young men sought refuge from the Vietnam War draft by going to college. Moreover, a decline in the size of the bonus that college graduates commanded, compared with high-school graduates, provided less reason to go to college.
• More men began going to college in the early 1990s. Changes in the economy and technology as well as a shortage of educated workers pushed the wages of college grads well above those of high-school graduates. The fraction of men in their late 20s with four-year degrees has been climbing since 1994, hitting 27.8% in 2010. Despite the uptick, however, that is barely above the 27.5% reported for 1976, according to the Census Bureau.
• For women, the trend is strikingly different. While male college-going fell off in the 1970s—in part because men were more likely than women to think they could get well-paid construction or factory jobs without degrees—women kept going. In 2010, 36% of women in their late 20s had earned at least a bachelor's degree, up from 20% in 1976.
• While college enrollment has risen lately—as often happens when people flee a lousy job market—completion rates are disappointing. "We've become very good at getting people to start college," says Harvard's Mr. Katz. "We are not very good at getting people through college."
• About 70% of high-school graduates enroll in a two- or four-year college soon after finishing high school, but many never get a degree or any other credential. At four-year colleges, 43% of those who enrolled as freshmen in 2002 hadn't received a degree six years later, according to the U.S. Department of Education.

• Tuition is up, particularly at public colleges that draw the most students. Over the past 10 years, for instance, average published tuition and fees (not counting room and board) at four-year public colleges rose by 72% to $8,240 from $4,790, adjusted for inflation, according to the College Board. Sticker prices are misleading because student aid has become more bountiful. After grants as well as tax deductions and credits, the average net price rose by a much smaller sum—$1,160—to $2,490 over the decade, but that is still an 87% increase.
• Today, student debt outstanding now exceeds Americans' total credit-card debt. In 2009-10, about 55% of public four-year college students graduated with debt; on average, they owed $22,000, the College Board says.
• "The greater society told me I had to go to college if I want to make it in life, but it's not true," said Mr. Gavic, who competes semiprofessionally in snowboarding. "I don't care about making a lot of money because I'm happy. I'm just living the life."
• "You spend all this time in school, then you are in debt, then you have to find a job to spend 20 years paying it back," he said. "That never made sense to me."