Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being—people’s evaluations and feelings about their lives. Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. We show that economic indicators have many shortcomings, and that measures of well-being point to important conclusions that are not apparent from economic indicators alone. For example, although economic output has risen steeply over the past decades, there has been no rise in life satisfaction during this period, and there has been a substantial increase in depression and distrust. We argue that economic indicators were extremely important in the early stages of economic development, when the fulfillment of basic needs was the main issue. As societies grow wealthy, however, differences in well-being are less frequently due to income, and are more frequently due to factors such as social relationships and enjoyment at work.
Important noneconomic predictors of the average levels of well-being of societies include social capital, democratic governance, and human rights. In the workplace, noneconomic factors influence work satisfaction and profitability. It is therefore important that organizations, as well as nations, monitor the well-being of workers, and take steps to improve it.
Assessing the well-being of individuals with mental disorders casts light on policy problems that do not emerge from economic indicators. Mental disorders cause widespread suffering, and their impact is growing, especially in relation to the influence of medical disorders, which is declining. Although many studies now show that the suffering due to mental disorders can be alleviated by treatment, a large proportion of persons with mental disorders go untreated. Thus, a policy imperative is to offer treatment to more people with mental disorders, and more assistance to their caregivers.
Supportive, positive social relationships are necessary for well-being. There are data suggesting that well-being leads to good social relationships and does not merely follow from them. In addition, experimental evidence indicates that people suffer when they are ostracized from groups or have poor relationships in groups. The fact that strong social relationships are critical to well-being has many policy implications. For instance, corporations should carefully consider relocating employees because doing so can sever friendships and therefore be detrimental to well-being.
Desirable outcomes, even economic ones, are often caused by well-being rather than the other way around. People high in well-being later earn higher incomes and perform better at work than people who report low well-being. Happy workers are better organizational citizens, meaning that they help other people at work in various ways. Furthermore, people high in well-being seem to have better social relationships than people low in well-being. For example, they are more likely to get married, stay married, and have rewarding marriages. Finally, well-being is related to health and longevity, although the pathways linking these variables are far from fully understood. Thus, well-being not only is valuable because it feels good, but also is valuable because it has beneficial consequences. This fact makes national and corporate monitoring of well-being imperative.
In order to facilitate the use of well-being outcomes in shaping policy, we propose creating a national well-being index that systematically assesses key well-being variables for representative samples of the population. Variables measured should include positive and negative emotions, engagement, purpose and meaning, optimism and trust, and the broad construct of life satisfaction. A major problem with using current findings on well-being to guide policy is that they derive from diverse and incommensurable measures of different concepts, in a haphazard mix of respondents. Thus, current findings provide an interesting sample of policy-related findings, but are not strong enough to serve as the basis of policy. Periodic, systematic assessment of well-being will offer policymakers a much stronger set of findings to use in making policy decisions.
Our thesis is that well-being should become a primary focus of policymakers, and that its rigorous measurement is a primary policy imperative. Well-being, which we define as peoples’ positive evaluations of their lives, includes positive emotion, engagement, satisfaction, and meaning (Seligman, 2002). Although economics currently plays a central role in policy decisions because it is assumed that money increases well-being, we propose that well-being needs to be assessed more directly, because there are distressingly large, measurable slippages between economic indicators and well-being. In this report, we outline some of these and propose that well-being ought to be the ultimate goal around which economic, health, and social policies are built.
We also argue that current measurement of well-being is haphazard, with different studies assessing different concepts in different ways, and therefore that a more systematic approach to measurement is needed. We propose that a set of national indicators of well-being be adopted and review evidence showing that these indicators will reveal important information not contained in the economic indicators. Finally, we argue that national indicators of well-being are needed not only because well-being is an important outcome in itself, but also because well-being is so often a cause of other valued outcomes, such as worker productivity and rewarding relationships.
In reviewing the evidence for our propositions, we first describe research on the societal contributors to well-being. Although much more research is needed on the societal correlates of well-being, it is clear that rising income has yielded little additional benefit to well-being in prosperous nations, pointing to one limitation of economic indicators. We also review factors in the workplace that influence well-being at work, and show that well-being on the job in turn predicts positive work behaviors and perhaps profitability. Finally, we review evidence showing that supportive social relationships are essential to well-being. Well-being, in turn, has positive effects on social relationships, as well as mental and physical health.1 We begin our review by discussing the relation between economic indicators and well-being.
Diener, E., &Seligman, M. E. (2004). Beyond money: Toward an economy of well-being. Psychological science in the public interest, 5(1), 1-31.