A meta-analytic review by SMU's Jacinth Tan and her team found that what matters more is how people 'perceive' their income and educational standing compared to others.
In the famous words of Mark Twain, “Comparison is the death of joy.”
In findings that are applicable to the workplace, and on the heels of the International Day of Happiness on 20 March, a study found that people with higher subjective socioeconomic status — i.e. their perception of their income and educational standing compared to others — reported significantly higher levels of happiness.
This relationship was also significantly larger than the connection between people’s actual income or educational attainment, and happiness.
The researchers team conducted a meta-analytic review of 357 studies, totalling 2,352,095 participants, of how strongly money and resources—measured objectively or subjectively—are linked to happiness. The review is the largest to date.
Overall, the findings from this review reaffirmed the notion that money and resources matter for happiness and that perceived material resources was a stronger predictor of happiness than actual income.
The study, titled The association between objective and subjective socioeconomic standing and subjective well-being, was led by Assistant Professor of Psychology Jacinth Tan (Singapore Management University) and published in the journal Psychological Bulletin. The study team comprised co-authors Associate Professor Michael Kraus (Yale University); Associate Professor Nichelle Carpenter (Rutgers University); and Professor Nancy Adler (University of California, San Francisco).
Key findings and implications
The researchers used the MacArthur Scale of Subjective Status — a 10-rung ladder in which people indicated their perceived social status — to test the association between comparative resources and happiness. They found that that higher social comparative resources was significantly associated with greater happiness, beyond objective levels of income and educational attainment.
The effect of social comparison was also stronger in countries with high population density, such as Singapore, given that there is often greater competition for resources in denser populations. The findings suggest that improving from past levels of material resources may not be enough, and that social comparison can lead to unhappiness when one determines their status compares less favourably to others.
According to Jacinth Tan: "Even if people today are earning higher wages or attaining higher educational levels than their parents or compared to 10 years ago, there is going to be limited impact on their happiness if they are not doing at least as well as, if not better than others at the present. In people’s minds, social mobility is not just the ability to ascend one’s own socioeconomic ladder, but also the sense that one is ascending the ladder in the broader, collective society.
"This will also be important to keep in mind as countries seek ways to emerge from the economic crisis due to the ongoing Covid-19 pandemic. While it is necessary to lift individuals from the current crisis, in the long run, governments must ensure that people are not just doing better than during the crisis, but continue to be able to rise in the post-pandemic society."
Notably, the authors believe that the impact of money and resources should not be ignored, in relevance to employers.
Tan added, “Realistically, we cannot increase everyone’s resources indefinitely, so how can we address such needs? At the societal level, could reducing competition and competitiveness help? At the individual level, could we inculcate the value of giving to others, contentment, or any other values that could reduce our tendency to compare to others?
"Understanding the additional functions and meaning of money and resources to individuals can inform more targeted interventions or policies aimed at increasing the happiness and well-being of a nation."
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