It's not the economy, stupid! How social capital and GDP relate to happiness over time

Abstract

What predicts the evolution over time of subjective well-being? We correlate the trends of subjective well-being with the trends of social capital and/or GDP. We find that in the long and medium run social capital largely predicts the trends of subjective wellbeing in our sample of countries. In the short-term this relationship weakens. Indeed, in the short run, changes in social capital predict a much smaller portion of the changes in subjective well-being than over longer periods. GDP follows a reverse path, thus confirming the Easterlin paradox: in the short run GDP is more positively correlated to well-being than in the medium-term, while in the long run this correlation vanishes.