BEIJING — The past quarter century has seen personal incomes go up roughly fivefold in China, and hundreds of millions of households have been able to afford color televisions, air conditioners, washing machines and refrigerators for the first time.
But more money and possessions haven’t made people any happier.
In fact, happiness in China fell sharply from 1990 to 2005, and today Chinese people are probably less happy, on average, than they were 25 years ago.
Those are the findings of a new study contained within the World Happiness Report 2017, released earlier this week, that has significant implications for China’s Communist Party and its likely success at maintaining social stability.
The study, by Richard A. Easterlin, Wang Fei and Wang Shun, draws on data from a variety of different surveys of happiness and feelings of subjective well-being, conducted at various times over the 1990 to 2015 period by the World Values Survey, Gallup, Horizon and the China General Social Survey, which all show broadly consistent trends.
In 1990, despite being poor, China was a relatively happy place compared to other nations, the report’s authors conclude, probably because the public sector offered what were seen as guaranteed jobs for life, along with subsidized food, housing, health care, child care and pensions — and even assurances of future jobs for people’s children.
It was a system known as the “iron rice bowl.”
But as China underwent one of the most rapid and dramatic economic transformations in history, the “iron rice bowl” was smashed. Even though the economy grew and average incomes rose, job security was undermined and unemployment increased as inefficient, labor-intensive public-sector enterprises were closed down.
The unemployment rate rose sharply from near-zero shortly before 1990 to double-digit levels in 2000-2005, while many other people felt less secure in their jobs.
At the same time, the social safety net began to fray, with private firms generally not offering the same benefits as the public sector.
The richer portion of society felt a little bit happier, one of the study’s authors, Wang Fei of Renmin University of China, said in an interview, but this was more than offset by the rising feelings of anxiety and insecurity among the less well-off.
Sure, those less well-off sections of society were becoming much less poor, but this was more than offset by rising anxieties, the pressure of competing in a new capitalist economy and the risks associated with failure.
In any case, happiness studies consistently show that rising incomes generally have a transitory impact on people’s feeling of well-being, especially as people see those around them getting richer too.
“People adapt quickly to a rise in income,” Wang said. “They set higher aspirations, and don’t feel happier just because they have more money.”
In human terms, this is hardly surprising: If people have lost their jobs, or fear they could lose their jobs, if they worry how they will pay for health care if a family member falls sick, if they are worried about their children’s futures and their own retirements, those anxieties will dominate their feeling of well-being.
Eastern Europe experienced a similar fall in happiness after the fall of the Berlin Wall, for similar reasons. China may have avoided the economic contraction experienced by the former Iron Curtain countries, but it did not escape the anxieties caused by transition.
The first major implication of the findings is that China’s Communist Party has weathered the storm. It has navigated through the most disruptive period of economic turbulence without losing power: thanks in part, of course, to a ruthless system of state repression.
But its ability to keep economic growth on track has also begun to reap benefits. The past decade has seen happiness levels begin to rise again, as continued economic growth has helped to bring down unemployment and given the government enough revenues to begin to rebuild the social safety net.
Today, with people once again beginning to feel happier, the Communist Party’s grip on power is probably as strong as it has ever been.
The Chinese government is “greatly aware” of these dynamics, said Wang, noting that Premier Li Keqiang’s keynote speech at the recently concluded annual National People’s Congress showed the government views employment as an even greater priority even than growth in gross domestic product.
“The aim of maintaining stable growth is primarily to ensure employment and promote the people’s well being, and a growth rate of between 6.5 percent and 7 percent will allow for relatively full employment,” Li said, in a speech that mentioned the word unemployment 21 times and stressed the need to create enough jobs for up to 7.65 million college graduates.
Some external pundits argue that the current slowdown in China’s economic growth could cause upheaval and unrest, but Wang said his findings show this should not be a big concern.
Firstly, he points out that China’s economy is so big that even slower growth rates still translate into large gains in income in absolute terms.
Meanwhile, the government has also built up a buffer in the rise in happiness experienced in the past decade, and learned from experience.
“The Chinese economy is now experiencing another time of transition, but I think this time the shock will be smaller, and the government will have learned lessons from the previous transition,” he said. “The pace of transition will be very stable, not rushed, not quick.”
Of course, some economists argue that the slow pace of reforms is in itself a problem: that China is not moving fast enough to rein in credit growth and reform state-owned enterprises and is setting its economy up for a fall further down the line.
But for now, and from his perspective, Wang said, the “conservative” strategy makes sense.
The overall happiness report showed wealthier countries with better social safety nets were best at keeping their citizens happy (Norway was the happiest of 155 countries surveyed) while extreme poverty and warfare make people unhappy (the Central African Republic came in last). The United States ranked 14th, Taiwan 33rd and mainland China 79th.
The chapter on China contained other slightly surprising findings, such as the fact that rising pollution and falling social trust did not explain the overall trend in happiness — nor, conversely, did rising life expectancy.
What matters most to people is income security, family life, and the health of oneself and one’s family, the report notes. When people are asked open-ended questions about what is important to their happiness, “broad societal matters such as inequality, pollution, political and civil liberties, international relations” — issues which most individuals have little ability to influence — are rarely mentioned.
“Abrupt changes in these conditions may affect happiness, but for the most part, such circumstances are taken as given,” the report said. “The things that matter most are those that take up most people’s time day after day, and which they think they have, or should have, some ability to control.”
Wang put it even more simply. Rising pollution can have an impact, he said, but “if I have no job, who cares if I have clean water or air?”