We know what effect recessions and booms tend to have on our bank accounts. But what about our feelings and wellbeing? The equation should be simple, right? Recession = sad. Economic boom = happy! But it’s a bit more complicated than that.
Recent research says that those who graduate during recessions are happier in the long run—satisfied with being employed unlike boom-time graduates who wonder if they should be doing better. Emily Bianchi, associate professor at Emory’s Goizueta Business School, likens this to research showing that bronze medalists at the Olympics are happier than silver medalists (who wonder why they didn’t win gold).
But what about the rest of us? New research from Jan-Emmanuel De Neve and Michael Norton, professors at the London School of Economics and Harvard respectively, looks at four decades of data (collected from more than 150 countries, including one dataset from the Centers for Disease Control and covers 2.5 million U.S. respondents) to investigate the relationship between life satisfaction and the business cycle. What they found was that well-being is two to eight times more sensitive to negative economic times: Psychologically, a recession hurts a lot more than a boom helps.