Economists have been concerned with the measurement of happiness and well-being for nearly 30 years, arguing that income alone is insufficient to accurately measure the prosperity of an economy. Recently the issue has also received a great deal of political backing, all three major parties have spoken of the need to pay greater attention to quality of life and happiness indicators, David Cameron has even spoken of using General Well Being (GWB) rather than Gross Domestic Product (GDP) as the primary measure of prosperity in the economy.

Research undertaken throughout the last 40 years suggests that once an individual reaches are certain ‘necessary’ income which they feel will sustain them, any further increase in income will have little impact upon there overall feeling of prosperity. This is supported by data which shows that although wages are significantly higher (in real terms) than in the 1960s, the overall level of happiness remains unchanged.

Happiness has also become an important issue due to the rise in the number of people suffering from some form of mental illness, this has lead to leading researchers such as Lord Richard Layard to recommend the introduction of local drop in centres with onsite therapists aimed at reducing long term mental stress.

The issue of work-life balance has a major influence of perceived well-being, new technologies and new working practices can be used to improve this balance in favour of the worker without their employer losing out.  

Fact File

• Supporters of the agenda point to evidence suggesting that despite an overall increase in wealth over the last 40 years, people are no happier.
• Lord Richard Layard (often known as “the guru of happiness” as a result of his extensive research in this area) estimates that mental illness now costs £17bn per year in medical bills and incapacity benefit. This makes mental illness the biggest single social issue ahead of even unemployment.
• NHS spending on mental health issues accounts for only 2% of their total spend.