Economic Growth and Happiness: A Cross-Nations Path Analysis Model

This paper directly and indirectly examines the impact of economic growth on happiness, with human development as moderator variable. Cross-nations data on economic growth, human development, and happiness indices were collected from 124 countries and employed in a path analysis model. The results show that economic growth had a direct negative and significant impact on both happiness and human development. Meanwhile, human development had a positive and significant direct impact on happiness. Indirectly, through moderator variable human development, economic growth again had a negative and significant impact on happiness. An implication of this finding was that economic growth is no longer a single important factor of a development indicator. It is then suggested that human development, rather than economic growth, sustainably be promoted in order to make everyone always feels happy.