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Uncertain times cast a cloud over happiness in Asia

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A Chinese family of three plays at a beach resort in Lianyungang city, east China's Jiangsu province, 20 June 2015. A new survey suggests that wealth is not the dominant factor in determining happiness in Asia. (Photo: AAP)

In Brief

The new normal of a global economy seems to be that happiness is harder to grasp for ordinary people. There are two major reasons for this.

First, the economic outlook is growing more difficult to predict and it is more common to see government attempts to lift growth fall flat.


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Far from experiencing tangible economic gains and a modicum of economic happiness, ordinary people find themselves more and more economically insecure. The changing macroeconomic landscape has substantial implications for possibilities for growth and attaining happiness in Asia.

Second, these hopes are buffeted by big structural changes inside the region, like demographic change, and shocks from outside like quantitative easing in the United States, Japan and the European Union.

Yet when we ask people in Asia and around the world how happy they are, how do they respond?

The 2014 Pew Research Center survey into global happiness covered 43 countries. Responses were collected on a ten-point scale with a score of 10 being the happiest and one the least happy; individuals who expressed a score of seven out of 10 or above are rated as ‘happy’.

Wealthy countries like the United States, Germany, the United Kingdom and Spain registered high happiness scores, with the percentage of people with a score of seven or above coming in at 65, 60, 58 and 54 per cent respectively. But several emerging market countries — including Mexico, Israel, Vietnam, China and India — were no less happy, with scores of 79, 75, 64, 59 and 44 per cent respectively. The Asian countries represented in the survey had scores ranging from 64 to 34 per cent.

While the Pew survey suggests that money or living standards might matter the most among all the determinants of happiness, there are many other factors that influence happiness.

The AsiaBarometer is another collection of happiness surveys from the early 2000s that specifically targeted 32 Asian societies and their neighbours, Russia and Australia, with the United States included as a reference point. The surveys provide an overall picture of happiness across Asian sub-regions. According to the AsiaBarometer, the happiest Asian sub-region is South Asia, second is Southeast Asia, third is Central Asia and fourth is East Asia.

What is fascinating about this result is the counterintuitive reverse positions of East and South Asia in terms of income and happiness. This suggests that wealth is not the dominant factor in determining happiness in Asia.

One possible explanation as to why poorer nations in Asia are happier is religion. South Asia is the most religious of the four subregions. The world’s largest Hindu populations live in India and Nepal, and the world’s largest Muslim populations — more than 550 million people — reside in South Asia, especially in India, Pakistan and Bangladesh. East Asia, on the other hand, boasts the highest income but is the least religious of the four subregions. On this measure, it also is the least happy.

The picture of Asia’s happiness that emerges from recent research seems to be shaped by two powerful forces: demographic change and quantitative easing (QE).

In the developed nations of East Asia, demographic change is putting pressure on income growth and intergenerational equity.

Japan’s low reproductive rate has prompted substantial policy changes to motivate young people to have more babies. From a record low of 1.26 in 2005 the fertility rate has climbed back up to 1.46 in 2015. But the number of women of childbearing age in Japan is still said to be far below the number needed for maintaining the reproductive rate at levels that would sustain the current population size.

Although highly educated Japanese women do not emigrate on the same massive scale as their South Korean counterparts, they do make up about 80 per cent of Japanese-origin employees in UN institutions. This suggests that highly educated Japanese women are unhappy at home. To improve the birth rate, policymakers may need to come up with ways to make life in Japan more enjoyable for women.

The second pressure affecting happiness in Asia is the central banks’ policy of QE because of its unpredictable effects on the economy. QE is a policy tool that is used to promote growth where there is persistent deflation of the economy by aggressively expanding the money supply. But QE has also aggravated already astronomical government deficits. While the anti-deflation measures are necessary to promote growth, QE could lead to a further downgrading of the Japanese government’s fiscal position, with potentially severe consequences.

The uncertainty surrounding these economic circumstances is likely to put downward pressure on happiness in Japan and its neighbours because people don’t like uncertainty. Some curious evidence for this has emerged from research into China’s experience of growth. In the early days of China’s period of economic liberalisation, people’s happiness took a tumble even as growth rates shot up, in part because people experienced enormous, rapid change over which they had very little control.

Asia’s circumstances provide interesting insights into happiness more generally. Happiness does not seem to equate directly and exclusively with wealth — the higher-income sub-region of East Asia does not seem to be the happiest whereas the lowest-income sub-region of South Asia is not the least happy. Many other factors, like high religiosity and intimate family connections, seem to play an important role in determining people’s life satisfaction. Context may be everything, with the new reality of a global economy presenting a range of challenges to the happiness of the well-off that need to be negotiated.

Takashi Inoguchi is emeritus professor of economics at the University of Tokyo, President of the University of Niigata Prefecture, and Director of the AsiaBarometer Survey. His recent works include The Quality of life in Asia (co-authored with Seiji Fujii, Springer, 2011) and Asia no Kofukudo (measuring Happiness across Asia)(Iwanami Shoten, 2014).

This article appears in the most recent edition of the East Asia Forum Quarterly, Japan–China Relations.

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