1 Well - Being , Social Capital and Public Policy : What ’ s New ?

This paper summarizes recent empirical research on the determinants of subjective wellbeing, and sketches possible implications for public policy. Results from national and international samples suggest that measures of social capital, including especially the corollary measures of specific and general trust, have substantial effects on well-being beyond those flowing through economic channels, as measured by incomes and employment status. Additionally, the international samples of well-being data (supported by parallel analysis of suicide data) show the importance of several measures of the quality of government. More recently, use of well-being data to estimate the incomeequivalent value of a variety of non-financial aspects of the workplace produces numbers so large as to suggest the existence of unexploited opportunities to improve both employee satisfaction and enterprise efficiency. In short, recent well-being results suggest renewed policy emphasis, in both the public and private sectors, on the social and institutional contexts within which firms and governments operate. Beyond this potentially vast, but largely unstudied, set of process improvements, there is an additional range of policy issues. These relate to the collection of data and the construction of research and policy agendas. Since subjective well-being measures are plausibly linked to the underlying utility experienced by individuals, and because such measures are very cheap to collect in the context of established surveys and pilot projects, there is a case to make for vastly increasing the quantity of well-being data available to aid future analysis. In particular, policy interventions should be routinely accompanied by prior and subsequent measures of well-being. On a more ambitious scale, large geo-coded surveys of social capital and 1 Paper presented at the special session on well-being at the Annual Meetings of the Royal Economic Society, Nottingham, March 21, 2005. It was written while I was Killam Visiting Scholar, Institute for Advanced Policy Research, University of Calgary. Regular e-mail still applies: [email protected] . I am especially grateful for the continued research collaboration of Haifang Huang, for hospitality and support from the University of Calgary and the Killam Foundation, for research support from the SSHRCC, and for data from the Statistics Canada RDC at UBC. In revising the paper, I am also grateful for helpful advice and suggestions from Curtis Eaton, Michael Jacobs, Daniel Kahneman and Richard Layard.