'Key to Happiness is Work, Not Necessarily Growth'

♠ Posted by Emmanuel in , at 12/16/2010 07:59:00 AM
Well here's another report that should put growth fetishists on the defensive. Before you start talking about endogeneity biases and how employment is related to economic growth, do note that the assertion above ain't mine. Rather, it's that of the International Institute of Labor Studies in Geneva--a research body of the International Labor Organization which, of course, is under the United Nations. International organizations, what'd we do without them?

Anyway, the notable assertion the IILS makes in the 2010 edition of the World of Work report is that life satisfaction is driven primarily by employment outcomes and not economic growth. This being a UN publication, you will not be surprised to note that the policy recommendation is thus to reduce unemployment and to reduce income inequalities stemming from unemployment. The summary concerning this finding is reproduced below, though the section of the report is well worth reading for those with an interest in labor or well-being:
Social cohesion should figure more prominently in the policy debate. The initial policy response contributed to building a sense that employment and social concerns were taken into account. However, continued social cohesion cannot be taken for granted if the strategy became less inclusive.
Already, there is growing evidence of a deteriorated social climate, especially in countries where job losses have been the highest. For example, out of 82 countries with available information, more than three-quarters indicate that in 2009, individual perceptions of their quality of life and standard of living have declined. The unemployment rate in these countries has risen by nearly 3 percentage points more than in the other countries. Even among those with a job, satisfaction at work has deteriorated significantly – in more than two-thirds of 71 countries with data, job satisfaction fell in 2009. Not surprisingly, perceptions of unfairness are growing (46 out of 83 countries) and people have less confidence in governments (36 out of 72 countries) than prior to the crisis. The Report shows that higher unemployment and growing income inequalities are key determinants of the deterioration in social climate indicators. By contrast, economic growth per se is not a very significant factor behind social climate indicators. This result reinforces the importance of job-centered policy action advocated by the ILO Global Jobs Pact.
In sum, adopting a job-centered exit strategy would enhance social cohesion while ensuring sustainable recovery from the crisis. This requires carefully-crafted fiscal support to tackle long-term unemployment, efforts to strengthen the links between labour incomes and productivity developments and financial reforms geared towards the needs of the real economy. As stressed by many observers, the crisis should be used as an opportunity to building a balanced global economy. The employment and social outlook suggests that time is running out to make this opportunity a reality.