During the last 30 years US citizens experienced, on average, a decline in reported happiness, social connections, and confidence in institutions. We show that a remarkable portion of the decrease in happiness is predicted by the decline in social connections and confidence in institutions. We carry out our investigation in three steps. First, we run a happiness regression that includes various indicators of social connections and confidence in institutions, alongside with own income, reference income, and the usual socio-demographic controls. We find that indicators of social connections and confidence in institutions are positively and significantly correlated with happiness. Second, we investigate the evolution of social connections and confidence in institutions over time, finding that they generally show a declining trend. Third, we calculate the variation in happiness over time as predicted by each of its statistically significant correlates, finding that the decrease in happiness is mainly predicted by the decline in social connections and by the growth in reference income. More precisely, the sum of the negative changes in happiness predicted by the reduction in social connections and the increase in reference income more than offsets the positive change predicted by the growth of household income. Also, the reduction in happiness predicted by the decline in confidence in institutions is non-negligible, although substantially smaller than the one predicted by either social connections or reference income.
This is a preview of subscription content, log in to check access.
Buy single article
Instant access to the full article PDF.
Price includes VAT for USA
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
This is the net price. Taxes to be calculated in checkout.
The explanation based on hedonic adaptation is consistent with the ‘set-point theory’, according to which a there is a fixed baseline for individual happiness, e.g., by personality traits, while actual happiness changes only temporarily due to external events (Costa and McCrae 1980). For a critic discussion of this theory see Headey (2007).
Confidence in institutions is sometimes not seen as a constitutive element of social capital, but as one of its correlates. Several papers, however, do include confidence in institutions among social capital indicators (for instance Paxton 1999), following a typical conceptualization applied in the in political science literature.
The distinction between intrinsic and extrinsic motivations has become familiar in social sciences. Various empirical studies in psychology have found that extrinsic motivations can crowd out intrinsic ones. This has given rise not only to a lively debate in psychology (Sansone and Harackievicz 2000), but it has also attracted interest among economists (Frey 1997; Kreps 1997; Benabou and Tirole 2003; for a survey see Frey and Jegen 2001).
See Uhlaner (1989) and Gui and Sugden (2005). Some studies have shown that relational goods are stringly correlated with reported well-being in surveys administered on nations’ representative samples, (Bruni and Stanca 2008; Helliwell 2006; Helliwell et al. 2009a, 2009b; and Helliwell and Putnam 2004) although relational goods are sometimes referred to with a different label. These papers echo a large psychological literature (e.g., Deci and Ryan 1985; Ryan and Deci 2001; Kasser 2002, for a review) which documents that intrinsic motivations positively affect people’s well-being, whereas extrinsic motivations display negative effects.
Knack (2003) does not refer to intrinsic and extrinsic motivations. Moreover, the types of groups recognized in the GSS do not coincide with those listed in the database used by Knack, so that our classifications are partly different. However, this is not the only reason for the minor differences between our and Knack's classification. We made some further changes because of a different interpretation: we find that groups whose main objective is to foster collective actions do not necessarily fall in the Olson category. For instance, we listed political parties among other groups—and not among Olson groups as Knack does—because, arguably, membership in a political party is not necessarily a matter of rent-seeking.
The GSS covers quite a long period of time—more than 30 years—and counts more than 45 thousand observations that are representative of the US census regions. However, the waves have not been carried out on a yearly basis. In particular, after 1974 we have observations only for the years 1975, 1976, 1977, 1978, 1979, 1980, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, 1993, 1994, 1996, 1998, 2000, 2002 and 2004. .
For instance, reported happiness is measured in the GSS by the survey question: “Taken all together, how would you say things are these days? Would you say you are very happy, pretty happy or not too happy?”, associating the numbers 1 to 3 to the three answers. We intend a higher number to mean greater happiness, so we associate 3 with “very happy”, 2 with “pretty happy” and 1 with “not too happy”.
Indeed, when marital status is added, the coefficient of household size becomes negative and significant (see Table 3).
Other two potential problems with our SCC variables are that they may be highly correlated and that they may be indicators of a smaller group of underlying variables. However, the correlation matrix shows that no pairwise correlation coefficient is greater than .45, and that three coefficients among the few that lie between .3 and .45 pertain to the indicators of trust in individuals. Moreover, a principal component analysis on all indicators (including the three trust indicators) shows that no component accounts for more than 11% of the total variation, while 18 components account for at least 3% each, and 29 components account for at least 2% each. In order to get 80% of the variation, we need at least 20 components out of 31, while for 90% of the variation, we need 25 components. Finally, we consider potential systematic factors underlying the indicators of confidence in institutions, concluding that there is no stable pattern of factors over time. The estimates can be found in the Appendix.
We do not have an intuitive explanation for the result regarding confidence in the press. It may be that more confidence in the press correlates with some personal trait that is against reporting high happiness.
The status “living as married” in the happiness equation emerges as not statistically significant in the case of the UK (Blanchflower and Oswald 2004), although it has been found both significantly and positively correlated in the case of a heterogeneous cross-section of countries (Helliwell 2003). The GSS provides data on cohabitation but only for a few year-specific observations, making them useless for our purposes.
The sociological literature has argued that social capital has not declined in the US, at least for what concerns membership in voluntary organizations and political participation. However, the contrasting evidence produced by, for instance, Baumgartner and Walker (1988) and Ladd (1996), has been either contested on methodological grounds (Smith 1990) or presented as fragmentary, as in Ladd (1996).
Strong evidence has been provided that happiness equations estimated with OLS are, for all practical purposes, equivalent to equations estimated with ordered logit and ordered probit (Ferrer-i-Carbonell and Frijters 2004).
Note also that the total variation associated with income is probably slightly underestimated because we lack observations on income for the year 2004 (we have used the 2002 data on income in place of that for 2004, which presumably would have provided greater income values).
Alesina, A., Di Tella, R., & MacCulloch, R. (2004). Inequality and happiness: Are Europeans and Americans different? Journal of Public Economics Elsevier, 88(9–10), 2009–2042.
Barrington-Leight, C. P., & Helliwell, J. F. (2008). Empathy and emulation, NBER working paper 14593.
Baumgartner, F. R., & Walker, J. L. (1988). Survey research and membership in voluntary associations. American Journal of Political Science, 32(4), 908–928.
Becchetti, L., Pelloni, A., & Rossetti, F. (2008). Relational goods, sociability and happiness. Kyklos, 61(3), 343–363.
Becchetti, L., Giachin Ricca, E., & Pelloni, A. (2009). The 60es turnaround as a test on the causal relationship between sociability and happiness. Econometica. Working papers wp07.
Benabou R., & Tirole, J. (2003). Intrinsic and extrinsic motivation, Review of economic studies, Oxford: Blackwell Publishing. 70(3), pp. 489–520, 07.
Blanchflower, D., & Oswald, A. (2004). Well-being over time in Britain and the USA. Journal of Public Economics, 88, 1359–1386.
Blanchflower, D., & Oswald, A. (2007) Is well-being U-shaped over the life cycle?, NBER working paper no. 12935.
Brehm, J., & Rahn, W. (1997). Individual-level evidence for the causes and consequences of social capital. American Journal of Political Science, 41, 99–1023.
Bruni, L., & Stanca, L. (2008). Watching alone. Happiness, relational goods and television. Journal of Economic Behavoir and Organization, 65(3–4), 506–528.
Clark, A., & Oswald A. (2002), Well-being in panels. mimeo, http://www.pse.ens.fr/clark/revClarkOsdec2002.pdf.
Clark, A. E., & Oswald, A. J. (1996). Satisfaction and comparison income. Journal of Public Economics, 61, 359–381.
Clark, A. E., & Senik, C. (2010). Who compares to whom? The anatomy of income comparisons in Europe. Economic Journal, 120, 573–594.
Clark, A., Diener, E., Geogellis, Y., & Lucas, R. E. (2008a). Lags and leads in life satisfaction: A test of the baseline hypothesis. Economic Journal, 118(529), F222–F243.
Clark, A., Frijters, P., & Shields, M. (2008b). Relative income, happiness and utility: An explanation for the Easterlin Paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.
Costa, D. L., & Kahn, M. E. (2003). Understanding the decline in social capital, 1952–1998. Kyklos, 56, 17–46.
Costa, P. T., & McCrae, R. R. (1980). Influences of extraversion and neuroticism on subjective well-being. Journal of Personality and Social Psychology, 38, 668–678.
Deci, E. L. (1971). Effects of externally mediated rewards on intrinsic motivation. Journal of Personality and Social Psychology, 18, 105–115.
Deci, E. L., & Ryan, R. M. (1985). Intrinsic motivation and self-determination in human behavior. New York: Plenum Press.
Di Tella, R. MacCulloch, R. J., & Andrew J. O. (2003). The macroeconomics of happiness, The review of economics and statistics. MIT Press, 85(4), pp. 809–827, 09.
Di Tella, R., & MacCulloch, R. (2008a). Gross national happiness as an answer to the Easterlin Paradox? Journal of Development Economics, 16(3), 22–42.
Di Tella, R., & MacCulloch, R. (2008b). Happiness adaptation to income ‘basic needs’. NBER working papers (14539).
Di Tella, R., Haisken-De New, J., & McCulloch, R. J. (2007). Happiness adaptation to income and to status in an individual panel, NBER working paper 13159.
Drakopoulos, S. A. (2008). The paradox of happiness. Journal of Happiness Studies, 9, 303–315.
Duesenberry, J. S. (1949). Income, savings and the theory of consumer behaviour. Cambridge, MA: Harvard University Press.
Easterlin, R. A. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. A. David & W. R. Melvin (Eds.), Nations and households in economic growth (pp. 98–125). Palo Alto, Ca: Stanford University Press.
Easterlin, R. A. (1995). Will raising the incomes of all increase the happiness of all? Journal of Economic Behavior & Organization, 27, 35–47.
Ferrer-i-Carbonell, A. (2005). Income and well-being: An empirical analysis of the comparison income effect. Journal of Public Economics, 89, 997–1019.
Ferrer-i-Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? The Economic Journal, 114(July), 641–659.
Ferrer-i-Carbonell, A., & Van Praag, B. M. S. (2008). Do people adapt to changes in income and other circumstances?, mimeo.
Fischer, C. S. (2008). What wealth-happiness paradox? Journal of Happiness Studies, 9, 219–226.
Frank, R. (1985). The demand for unobservable and other nonpositional goods. American Economic Journal, 75, 101–116.
Frank, R. H. (1999). Luxury fever. New York: The Free Press.
Frederick, S., & Loewenstein, G. (1999). Hedonic adaptation. In D. Kanheman & E. Diener (Eds.), The foundations of hedonic psychology (pp. 302–329). New York: Russel Sage Foundation.
Frey, B. S. (1997). A constitution for knaves crowds out civic virtues. Economic Journal, 107(443), 1043–1053.
Frey, B. S., & Jegen, R. (2001). Motivational crowding out: A survey of empirical evidence. Journal of Economic Surveys, 15, 589–611.
Frey, B. S., & Stutzer, A. (2002). What can economists learn from happiness research? Journal of Economic Literature, 40(2), 402–435.
Glaeser, E. L., Laibson, D. I., Scheinkman, J. A., & Soutter, C. L. (2000). Measuring trust. The Quarterly Journal of Economics, 115(3), 811–846.
Gui, B., & Sugden., R. (2005). Economics and social interaction. Cambridge: Cambridge University Press.
Headey, B. (2007). The set-point theory of well-being needs replacing. Discussion papers 753, DIW Berlin, German Institute for Economic Research.
Helliwell, J. F. (2003). How’s life? Combining individual and national variables to explain subjective well-being. Economic Modelling, 20(2), 331–360.
Helliwell, J. F. & Putnam R. D. (2004). The social context of well-being, Philosophical Transactions, 359(1449), 1435–1446. Reprinted in F. A. Huppert, B. Kaverne, & N. Baylis (Eds.), The Science of Well-Being. London: Oxford University Press.
Helliwell, J. F. (2006). Well-being, social capital and public policy: What’s new? The Economic Journal, 116(510), C34–C45.
Helliwell, J. F., Barrington-Leight C. P., Harris A., & Huang, H. (2009). International evidence on the social context of well-being. NBER working paper, no. 147020.
Helliwell, J. F. & Huang, H. (2009). How’s the job? Well-being and social capital in the workplace. Industrial and labor relations review (forthcoming).
Kasser, T. (2002). The high price of materialism. Cambridge: MIT Press.
Knack, S. (2003). Groups, growth and trust: Cross-country evidence on the Olson and Putnam hypotheses. Public Choice, 117, 341–355.
Kreps, D. M. (1997). Intrinsic motivation and extrinsic incentives. American Economic Review, 87(2), 359–364.
Ladd, E. (1996). The data just don’t show erosion of America’s social capital. Public Perspective, 7, 1–30.
Layard, R. (1980). Human satisfaction and public policy. Economic Journal, 90, 737–750.
Layard, R., G. Mayraz, & Nickell, S. (2009). Does relative income matter? Are the critics right?. In E. Diener, D. Kahneman, and J. Helliwell (Eds.). Forthcoming proceedings of the Princeton meeting on international differences in well-being.
Luttmer, E. F. P. (2005). Neighbors as negatives; relative earnings and well-being. Quarterly Journal of Economics, 120(3), 923–1002.
McPherson, M., Smith-Lovin, L., & Brashears, M. E. (2006). Social isolation in America: Changes in core discussion networks over two decades. American Sociological Review, 71(June), 353–375.
OECD. (2001). The well-being of nations: The role of human and social capital. Paris: Organization for Economic Cooperation and Development.
Olson, M. (1982). The rise and decline of nations: Economic growth, stagflation and social rigidities. Yale UP: New Haven.
Paxton, P. (1999). Is social capital declining in the United States? A multiple indicator assessment. American Journal of Sociology, 105(1), 88–127.
Putnam, R. D. (1993). Making democracy work: Civic traditions in modern Italy. Princeton NJ: Princeton University Press.
Putnam, R. D. (2000). Bowling alone. The collapse and revival of American community. New York: Simon & Schuster.
Robinson, R. V., & Jackson, E. F. (2001). Is trust in others declining in America? An Age—Period—Cohort analysis. Social Science Research, 30, 117–145.
Ryan, R. M., & Deci, E. L. (2001). On happiness and human potential: A review of research on hedonic and eudaimonic well-being. Annual Review of Psychology, 52, 141–166.
Sacks, D. W., Stevenson, B., Justin W. (2010). Subjective well-being, income, economic development and growth. NBER working paper no. 16441.
Sansone, & Harackiewicz. (2000). Intrinsic and extrinsic motivations. Sand Diego, CA: Academic Press.
Schwarze, J., & Härpfer, M. (2007). Are people inequality averse, and do they prefer redistribution by the state? Evidence from german longitudinal data on life satisfaction. Journal of Socio-Economics, 36(2), 233–249.
Senik, C. (2008). Is man doomed to progress? Journal of Economic Behavior & Organization, 68(1), 140–152.
Senik, C. (2009). Income distribution and subjective happiness. A survey. OECD social, employment and migration working papers no. 96.
Smith, T. W. (1990). Trends in voluntary group membership: Comments on Baumgartner and Walker. American Journal of Political Science, 34(3), 646–661.
Solnick, S. J., & Hemenway, D. (2005). Are positional concerns stronger in some domains than in others? American Economic Review, 95(2), 147–151.
Stevenson, B., & Wolfers, J. (2008). Economic growth and happiness: Reassessing the Easterlin Paradox. Brookings papers on economic activity.
Stiglitz, S., Sen, A., & Fitoussi, J. P. (2009). Report by the commission on the measurement of economic performance and social progress. http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf.
Stolle, D., & Hooghe, M. (2004). Inaccurate, exceptional, one-sided or irrelevant? The debate about the alleged decline of social capital and civic engagement in western societies. British Journal of Political Science, 35, 149–167.
Uhlaner, C. J. (1989). Relational goods and participation: Incorporating sociability into a theory of rational action. Public Choice, 62(3), 253–285.
Veblen, T. (1899). The theory of the leisure class. New York: Macmillan.
Vendrik, M., & Woltjer, G. B. (2007). Happiness and loss aversion: Is utility concave or convex in relative income? Journal of Public Economics, 91(7–8), 1423–1448.
We would like to thank Andrea Battinelli, Marina Bianchi, Leonardo Boncinelli, Paola Bordandini, Roberto Cartocci, Sergio Currarini, Andrew Clark, Massimo D’Antoni, Sergio Destefanis, Massimo De Vito, Francesco Drago, Daniela Federici, Francesco Ferrante, Kyosuke Kurita, Mario Lavezzi, Malgorzata Micucka, Joel Mokyr, Tushar Kanti Nandi, Ugo Pagano, Vittorio Pelligra, Fabio Petri, Robert Putnam, Ernesto Savaglio, Betsey Stevenson, Mauro Sylos Labini, Silvia Tiezzi, and Giulio Zanella for their valuable comments. We especially thank Samuel Bowles, John Helliwell, and the anonymous referees of this journal for their important suggestions on how to improve our results. All mistakes remain ours. We acknowledge the PRIN 2004–2007 research group on “Economics, happiness and inter-personal relationships” for financial support to this research.
Electronic supplementary material
Below is the link to the electronic supplementary material.
About this article
Cite this article
Bartolini, S., Bilancini, E. & Pugno, M. Did the Decline in Social Connections Depress Americans’ Happiness?. Soc Indic Res 110, 1033–1059 (2013). https://doi.org/10.1007/s11205-011-9971-x
- Social connections
- Trust in institutions
- Social capital
- Subjective well-being
- Easterlin paradox
- Relational goods
- Intrinsic motivations