Cognitive ability and economic growth: how much happiness is optimal?

International Review of Economics - Tập 70 - Trang 63-100 - 2022
Nik Ahmad Sufian Burhan1,2, Mohamad Fazli Sabri1, Heiner Rindermann3
1Faculty of Human Ecology, Universiti Putra Malaysia, Serdang, Malaysia
2Institute for Social Science Studies, Universiti Putra Malaysia, Serdang, Malaysia
3Department of Psychology, Chemnitz University of Technology, Chemnitz, Germany

Tóm tắt

The cognitive human capital approach assumes that cognitive abilities (CA) enable societies to be innovative and competitive and to achieve higher productivity and prosperity. However, does happiness enhance the effect of CA on economic growth? Our study views happiness as an intrinsic motivator that helps workers be more productive and get the most out of their CA. Regression analyzes using two different measures for CA showed strong evidence that CA generated economic growth from 1960 to 2017, even though it interacted negatively with happiness. These results were found to be robust after controlling for endogeneity bias using instrumental variable for happiness. In addition, the threshold regression analyses revealed significant evidence that the relationships between CAs and growth vary according to happiness levels. Two prominent ranges of threshold were established: γ1 = 4.75–4.96 and γ2 = 6.16–6.43 on the 0 to 10 happiness scale. Accordingly, the effects of CA were smallest in very unhappy countries (happiness < γ1), strongest in fairly happy societies (happiness of γ1 − γ2), and moderately strong among the happiest countries (happiness ≥ γ2). In summary, the pursuit of highest productivity growth seems to require an optimal level of happiness, where moderate level of happiness (likely indicative of existence of higher motivation with little emotional distress) could inspire and drive people to fully utilize their cognitive capital and achieve high economic growth.

Tài liệu tham khảo

Altinok N, Diebolt C, Demeulemeester JL (2014) A new international database on education quality: 1965–2010. Appl Econ 46(11):1212–1247 Angrist N, Djankov S, Goldberg PK, Patrinos HA (2021) Measuring human capital using global learning data. Nature 592:403–408 Bai J, Perron P (2003) Critical values for multiple structural change tests. Econom J 6(1):72–78 Barro RJ (1991) Economic growth in a cross section of countries. Q J Econ 106:407–443 Barsade SG, Gibson DE (2007) Why does affect matter in organizations. Acad Manag Perspect 21(1):36–59 Bartels M (2015) Genetics of wellbeing and its components satisfaction with life, happiness, and quality of life: a review and meta-analysis of heritability studies. Behav Genet 45(2):137–156 Bellet C, De Neve JE, Ward G (2020) Does employee happiness have an impact on productivity? CEP Discussion Paper No 1655. Centre for Economic Performance, London School of Economics and Political Science (pp 1–48) Bénabou R, Tirole J (2003) Intrinsic and extrinsic motivation. Rev Econ Stud 70(3):489–520 Böckerman P, Ilmakunnas P (2012) The job satisfaction-productivity nexus: a study using matched survey and register data. ILR Rev 65(2):244–262 Bruni L, De Rosa D, Ferri G (2019) Cooperatives and happiness. Cross-country evidence on the role of relational capital. Appl Econ 51(30):3325–3343 Burhan NAS, Razak RC, Salleh F, Tovar MEL (2017) The higher intelligence of the ‘creative minority’ provides the infrastructure for entrepreneurial innovation. Intelligence 65:93–106 Burhan NAS, Razak RC, Ibrahim S, Selamat MR, Rosli MR (2018) Social classes of intelligence, economic growth and technological achievement: robust regression and outlier detection. J Interdiscip Econ 30(2):148–163 Buss DM (2000) The evolution of happiness. Am Psychol 55(1):15–23 Bryson A, Forth J, Stokes L (2017) Does employees’ subjective well-being affect workplace performance? Human Relat 70(8):1017–1037 Coyle ThR, Rindermann H, Hancock D (2016) Cognitive capitalism: economic freedom moderates the effects of intellectual and average classes on economic productivity. Psychol Rep 119(2):411–427 Coyle ThR, Rindermann H, Hancock DG, Freeman J (2018) Nonlinear effects of cognitive ability on economic productivity. J Individ Differ 39(1):39–47 Delaney JT, Huselid MA (1996) The impact of human resource management practices on perceptions of organizational performance. Acad Manag J 39(4):949–969 DellaVigna S, Pope D (2017) What motivates effort? Evidence and expert forecasts. Rev Econ Stud 85(2):1029–1069 DiMaria CH, Peroni C, Sarracino F (2020) Happiness matters: productivity gains from subjective well-being. J Happiness Stud 21(1):139–160 Easterlin RA (1974) Does economic growth improve the human lot? Some empirical evidence. In: David PA, Reder MW (eds) Nations and households in economic growth. Academic Press, New York, pp 89–125 Easterlin RA, McVey LA, Switek M, Sawangfa O, Zweig JS (2010) The happiness–income paradox revisited. Proc Natl Acad Sci 107(52):22463–22468 Feenstra RC, Inklaar R, Timmer MP (2015) The next generation of the Penn world table. Am Econ Rev 105:3150–3182 Frey BS (2018) Happiness and management. In: Frey BS (ed) Economics of happiness. Springer, Cham, pp 55–58 Gneezy U, Rustichini A (2000) Pay enough or don’t pay at all. Q J Econ 115(3):791–810 Goldstein K (1947) Human nature in the light of psychopathology. Harvard University Press, Cambridge, MA Gottfredson LS (2007) Innovation, fatal accidents, and the evolution of general intelligence. In: Roberts MJ (ed) Integrating the mind: domain general versus domain specific processes in higher cognition. Psychology Press, Hove, UK, pp 387–425 Gottfredson LS (2018) g theory: how recurring variation in human intelligence and the complexity of everyday tasks create social structure and the democratic dilemma. In: Sternberg RJ (ed) The nature of human intelligence. Cambridge University Press, New York, pp 130–151 Grinblatt M, Ikäheimo S, Keloharju M, Knüpfer S (2015) IQ and mutual fund choice. Manag Sci 62:924–944 Grinde B (2002) Happiness in the perspective of evolutionary psychology. J Happiness Stud 3(4):331–354 Gwartney JD, Lawson RA, Hall JC, Murphy RH (2020) Economic freedom of the world: 2020 annual report. Vancouver, BC: The Fraser Institute Haggard S, Tiede L (2011) The rule of law and economic growth: where are we? World Dev 39(5):673–685 Hanushek EA, Woessmann L (2011) The economics of international differences in educational achievement. In: Hanushek EA, Machin S, Woessmann L (eds) Handbook of the economics of education, vol III. Elsevier, Amsterdam, pp 89–200 Hanushek EA, Woessmann L (2015) The knowledge capital of nations. Education and the economics of growth. MIT Press, Cambridge, MA Hart M (2007) Understanding human history. An analysis including the effects of geography and differential evolution. Washington Summit, Athens Harter JK, Schmidt FL, Asplund JW, Killham EA, Agrawal S (2010) Causal impact of employee work perceptions on the bottom line of organizations. Perspect Psychol Sci 5(4):378–389 Hayek FA (2011/1960) The constitution of liberty. Chicago: University of Chicago Press Helliwell J, Layard R, Sachs J, De Neve JE (2020) World happiness report 2020. Sustainable Development Solutions Network, New York Hori M, Kamo Y (2018) Gender differences in happiness: the effects of marriage, social roles, and social support in East Asia. Appl Res Qual Life 13(4):839–857 Hosie P, Willemyns M, Sevastos P (2012) The impact of happiness on managers’ contextual and task performance. Asia Pac J Human Resour 50:268–287 Inglehart R (1977) The silent revolution: changing values and political styles among western publics. Princeton University Press, Princeton, New Jersey Inglehart R (2018) Culture shift in advanced industrial society. Princeton University Press, Princeton Jebb AT, Tay L, Diener E, Oishi S (2018) Happiness, income satiation and turning points around the world. Nat Hum Behav 2:33–38 Johnson S, Robertson I, Cooper CL (2018) Well-being and employee engagement. In: Johnson S, Robertson I, Cooper CL (eds) WELL-BEING. Palgrave Macmillan, Cham, pp 31–42 Jones G (2012) Cognitive skill and technology diffusion: an empirical test. Econ Syst 36(3):444–460 Jones G (2016) Hive mind: how your nation’s IQ matters so much more than your own. Stanford University Press, Stanford Jones GR, George JM, Hill CW (2000) Contemporary management. Irwin/McGraw-Hill, Boston, MA Jones G, Schneider WJ (2006) Intelligence, human capital, and economic growth: A Bayesian averaging of classical estimates (BACE) approach. J Econ Growth 11(1):71–93 Jones G, Schneider WJ (2010) IQ in the production function: evidence from immigrant earnings. Econ Inq 48:743–755 Kahneman D, Deaton A (2010) High income improves evaluation of life but not emotional well-being. Proc Natl Acad Sci 107:16489–16493 Kanazawa S (2004) The Savanna principle. Manag Decis Econ 25(1):41–54 Kanazawa S, Li NP (2018) The Savanna theory of happiness. In: Hopcroft RL (ed) Oxford handbook of evolution, biology, and society. Oxford University Press, Oxford, pp 171–194 Kaufman SB, Reynolds MR, Liu X, Kaufman AS, McGrew KS (2012) Are cognitive g and academic achievement g one and the same g? An exploration on the Woodcock-Johnson and Kaufman tests. Intelligence 40(2):123–138 Koys DJ (2001) The effects of employee satisfaction, organizational citizenship behavior, turnover, and organizational effectiveness: a unit-level, longitudinal study. Pers Psychol 54(1):101–114 Krekel C, Ward G, De Neve JE (2019) Employee well-being, productivity, and firm performance: evidence and case studies. In: The Global Council for Happiness and Wellbeing (Ed.), Global happiness and wellbeing policy report 2019. Global Council for Happiness and Wellbeing. (pp 73–94) Lee RB, Daly R (eds) (1999) The Cambridge encyclopedia of hunters and gatherers. Cambridge University Press, Cambridge Li NP, Kanazawa S (2016) Country roads, take me home… to my friends: how intelligence, population density, and friendship affect modern happiness. Br J Psychol 107(4):675–697 Lim SS, Updike RL, Kaldjian AS, Barber RM, Cowling K, York H, Friedman J, Xu R, Whisnant JL, Taylor HJ, Leever AT (2018) Measuring human capital: a systematic analysis of 195 countries and territories, 1990–2016. Lancet 392:1217–1234 Lucas RE (1988) On the mechanics of economic development. J Monet Econ 22:3–42 Lynn R, Becker D (2019) The intelligence of nations. Ulster Institute for Social Research, London Lynn R, Vanhanen T (2012) Intelligence: a unifying construct for the social sciences. Ulster Institute for Social Research, London Mankiw NG, Romer D, Weil DN (1992) A contribution to the empirics of economic growth. Q J Econ 107(2):407–437 Maslow AH (1970) Motivation and personality, 2nd edn. Harper & Row, New York McMahon F (2014) Economic freedom (Fraser Institute and Heritage Foundation). In: Michalos AC (ed) Encyclopedia of quality of life and well-being research. Springer, Netherlands, Dordrecht, pp 1795–1799 Meisenberg G, Lawless E, Lambert E, Newton A (2006) The social ecology of intelligence on a Caribbean island. Mank Q 46:395–433 Milks A, Parker D, Pope M (2019) External ballistics of Pleistocene hand-thrown spears: experimental performance data and implications for human evolution. Sci Rep 9(1):1–11 Mincer J (1958) Investment in human capital and personal income distribution. J Polit Econ 66:281–302 Minkov M, Bond MH (2017) A genetic component to national differences in happiness. J Happiness Stud 18(2):321–340 Murphy RH (2016) A comment on “measuring economic freedom: a comparison of two major sources.” J Priv Enterp 31(3):69–91 Murray Ch (2003) Human accomplishment: the pursuit of excellence in the arts and sciences, 800 B.C. to 1950. Harper-Collins, New York Myers DG, Diener E (2018) The scientific pursuit of happiness. Perspect Psychol Sci 13(2):218–225 Nesse RM (2004) Natural selection and the elusiveness of happiness. Philos Trans Royal Soc Lond Series B Biol Sci 359(1449):1333–1347 Nettle D (2005) Happiness: the science behind your smile. Oxford University Press, New York Nyborg H, Jensen AR (2001) Occupation and income related to psychometric g. Intelligence 29(1):45–55 Oishi S, Diener E, Lucas RE (2007) The optimum level of well-being: can people be too happy? Perspect Psychol Sci 2(4):346–360 Oswald AJ (1997) Happiness and economic performance. Econ J 107(445):1815–1831 Oswald A, Proto E, Sgroi D (2015) Happiness and productivity. J Law Econ 33(4):789–822 Piekałkiewicz M (2017) Why do economists study happiness? Econ Labour Relat Rev 28(3):361–377 Proto E, Oswald AJ (2017) National happiness and genetic distance: a cautious exploration. Econ J 127(604):2127–2152 Rindermann H (2018) Cognitive capitalism: human capital and the wellbeing of nations. Cambridge University Press, Cambridge Rindermann H, Baumeister AEE (2015) Validating the interpretations of PISA and TIMSS tasks: a rating study. Int J Test 15(1):1–22 Rindermann H, Becker D (2018) FLynn-effect and economic growth: do national increases in intelligence lead to increases in GDP? Intelligence 69:87–93 Rindermann H, Carl N (2018) Human rights: why countries differ. Comp Sociol 17:29–69 Rindermann H, Carl N (2020) The good country index, cognitive ability and culture. Comp Sociol 19:39–68 Rodrik D, Subramanian A, Trebbi F (2004) Institutions rule: the primacy of institutions over geography and integration in economic development. J Econ Growth 9(2):131–165 Romer PM (1990) Endogenous technological change. J Polit Econ 98(5):S71–S102 Ryan RM, Deci EL (2000) Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. Am Psychol 55(1):68–78 Sabri MF, Dass TM, Burhan NAS, Abdul Wahab HAR, Wijekoon R, Simanjuntak M (2021) Determinants of life satisfaction among female-headed households in Malaysia. Int J Bus Soc 22(1):276–295 Salgado JF, Anderson N, Moscoso S, Bertua C, De Fruyt F, Rolland JP (2003) A meta-analytic study of general mental ability validity for different occupations in the European Community. J Appl Psychol 88:1068–1081 Shad M, Ibrahim S, Azman-Saini WNW, Baharumshah AZ, Burhan NAS (2018) The impact of social capital on international financial integration. Int J Econ Manag 12(S2):583–597 Schmidt FL (2012) Cognitive tests used in selection can have content validity as well as criterion validity. Int J Sel Assess 20:1–13 Schultz D (1977) Growth psychology: models of the healthy personality. Van Nostrand, New York Shuck B, Reio TG (2014) Employee engagement and well-being a moderation model and implications for practice. J Leadersh Organ Stud 21(1):43–58 Stock JH, Watson MW (2020) Introduction to econometrics, 4th edn. Pearson Education Limited, Harlow Veenhoven R (2014) Happiness levels stability. In: Michalos AC (ed) Encyclopedia of quality of life and well-being research. Springer, Netherlands, Dordrecht, pp 2667–2669 Weede E (2004) Does human capital strongly affect economic growth rates? Yes, but only if assessed properly. Comp Sociol 3(2):115–134 Weede E, Kämpf S (2002) The impact of intelligence and institutional improvements on economic growth. Kyklos 55:361–380 Whiteley PF (2000) Economic growth and social capital. Political Studies 48:443–466 World Bank (2020) World Development Indicators 2020. Accessed from: World Bank. http://data.worldbank.org/products/wdi World Bank (2021) Worldwide Governance Indicators. Accessed from: World Bank. https://databank.worldbank.org/source/worldwide-governance-indicators Wright TA, Cropanzano R (2004) The role of psychological well-being in job performance: a fresh look at an age-old quest. Organ Dyn 33(4):338–351