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Study: Being happy may bring you more money down the road
First Published Nov 19 2012 08:08 pm • Last Updated Nov 21 2012 09:38 pm

Los Angeles • Scientists may have discovered the secret to avoiding the fiscal cliff: Happiness.

Regardless of whether money can buy happiness, being happy may actually make you more money down the road, new research finds.

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People who express more positive emotions as teenagers and greater life satisfaction as young adults tend to have higher incomes by the time they’re 29, according to a study published Monday by the Proceedings of the National Academy of Sciences.

The difference was so great that when measuring life satisfaction on a 5-point scale, a 1-point jump at age 22 made a $2,000 difference in income down the line. Between the gloomiest and the happiest brackets, that amounts to an $8,000 earnings swing.

Drawing on data from the federally funded Add Health survey of teenagers, the researchers examined the profiles of more than 10,000 Americans at ages 16, 18 and 22 as well as their annual incomes at 29. They controlled for a number of factors known to contribute to financial success, including education level, IQ, height and self-esteem.

Whether smart or simple-minded, tall or short, self-confident or insecure, happier people earned bigger paychecks than more doleful peers: Deeply unhappy teens’ future incomes were 30 percent lower than the average, while very happy teens earned 10 percent above average.

The research team took the analysis even further, comparing roughly 3,000 people in sibling pairs who shared the same parents and, presumably, the same socioeconomic status. The happier siblings, they found, still did better than their less-happy counterparts.

The findings suggest that interventions to encourage more positive thinking in kids and teens could greatly improve their future success, said Michael Norton, a behavioral scientist at Harvard Business School who was not involved in the study.

It might be difficult, but by no means impossible. Researchers have looked at all sorts of things that make people happier: Spending money for the sake of others seems to give people a boost, as does actively being kind to others.

"It’s kind of like losing weight," said Sonja Lyubomirsky, a University of California, Riverside social psychologist and author of The How of Happiness, who was not involved in the study. "If you’re genetically predisposed to not being a happy person, you have to put a lot of effort into it."


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The paper was a longitudinal study and not an experiment, so it’s not entirely clear whether happiness truly caused the higher earnings. But the study did show that happier teens were more likely to get a college degree, to get hired and promoted and to be optimistic, extroverted and less neurotic.

"Early happiness probably changes so many things about your life that even if later in life you’re not as happy as you were, those formative experiences continue to play themselves out," said Norton, co-author of the book Happy Money: The Science of Smarter Spending.

How much is happiness motivating people to do better and how much is it simply causing others to give us more opportunities? In other words, can unhappy people fake it until they make it?

"I would bet they would get some of the benefits," Lyubomirsky said. Still, she said, most of the value of happiness probably comes from how it affects the person feeling it, not what others perceive.

The study results may even have policy implications for central banks and political leaders looking to take lagging American and European economies out of their recent downturns, said lead author Jan-Emmanuel De Neve, an assistant professor of political economy and behavioral science at University College London.

Previous research by De Neve’s co-author, economics professor Andrew Oswald of the University of Warwick in England, has suggested that low unemployment makes people happier than low inflation. Perhaps if governments focused on stimulating job growth, even if those measures boosted inflation, they would lead to greater happiness — and thus more prosperity overall, De Neve mused.

A little individual happiness, spread over entire populations, could have a massive combined effect, perhaps pulling depressed economies out of their slumps.

"Even the fiscal cliff could be averted that way," De Neve said. Then he laughed. "I’m just kidding. Who knows? Maybe."



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