Chicago Booth Review Podcast Is Money or Marriage the Key to Happiness?

Sam Peltzman: If you have a stable 30-point happiness premium for being married and the share of the population that is married goes down, which it has dramatically, that's going to translate and mathematically has to translate into a decline in happiness.

Hal Weitzman: One of the oldest pieces of tongue-in-cheek advice to young people is to marry money. Turns out that not only does that make you rich, it's also good for happiness. Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking academic research in a clear and straightforward way. I'm Hal Weitzman, and today I'm speaking with Chicago Booth's Sam Peltzman about his research on happiness using the general social survey run by NORC, a non-partisan research organization at the University of Chicago.

If you are married, you are statistically much more likely to report being happy than if you're unmarried. In fact, Peltzman notes that the difference in terms of happiness is the same as either being in the top 10% of earners or the bottom 10%. Having said that, his research also shows that the richer you are, the happier you are. So, should we all marry money? Okay, Sam Peltzman, welcome back to the Chicago Booth Review Podcast.

Sam Peltzman: It's my pleasure.

Hal Weitzman: We had such a fun chat with you last time about people becoming more conservative as they get older, that we wanted to have you back to talk about happiness. And the same data set that told us, that revealed that Americans become more conservative a bit, maybe not a huge amount, as they become older, tells us who are the happiest Americans, not how to become happy maybe, but who are the happiest Americans. They're married. Well, they tend to be married. They tend to have a good income, which makes sense.

Sam Peltzman: Yes, although that's complicated.

Hal Weitzman: Okay, well, we'll talk about it. They tend to be conservative and there are some elements to do with men or women, different races. So let's get into all of that. So maybe tell us at a basic level, married people are 30 percentage points happier than unmarried people in this data. How are you measuring happiness?

Sam Peltzman: Okay, so this is...

Hal Weitzman: First of all, remind us what the survey is that you're using.

Sam Peltzman: This is the General Social Survey. There are others that will reveal pretty much the same kind of results, but the General Social Survey is the granddaddy of all of these, in the sense that it's been around for 50 years and it has asked the same question of a random sample of the population for each of these surveys. They're now every two years. They used to be every year.

But basically you get a 50-year history of the American population with, and this is important in survey research, the exactly same phrase question. And this question is, on the whole, I have to paraphrase because I'm not reading it off of a monitor, on the whole, do you consider yourself very happy, okay, or not so okay, not so happy? One, two, three. Around half of a random sample of the popula...

Any random sample will say they're in the middle, and part of the reason is the survey design. If you're asked the question with three choices, there's a general tendency... Again, if there's not much stake in it in your answer, I'll give them the middle answer. And that's what you get in half the cases. But in half you get either yes, I'm happy or no, I'm not.

Hal Weitzman: So just to be clear, the three choices are happy, unhappy, and meh, in the middle somewhere.

Sam Peltzman: Yes. And the middle answer is about half, half of the answers will be in the middle. The way I measure this, I am not going to tell you it's 2.8 on a one point. That doesn't mean anything. But here's what's meaningful. You can look at the extremes, happy and not happy. Of the 50% who are answering yes or no among a married sample, 40 to 10 are happy. That's a margin of 30 points. That's where the 30 points comes.

That's part one. A random sample of the unmarried population, also half will say they're okay. But of the ones who are committing, it's 50/50. A margin of zero, exactly zero. 25 happy and 25 sad. Compare that to 40 to 10. That's a very, very big difference. Not only is it big, but it is rock stable for 50 years. It bounces around a little bit, but there's really no trend to that 30-point difference. 40-10 as opposed to 25-20. That is the same now as it was in 1972.

Hal Weitzman: When was the most recent survey?

Sam Peltzman: The one I use is 2018. It's just the last one before COVID.

Hal Weitzman: Right. Okay. So before the pandemic, we were not... Because there's a general narrative that people are becoming less happy.

Sam Peltzman: That's true. And that's true. It's not on the marriage dimen... The married-unmarried dimension is absolutely stable. One reason they're becoming unhappier on average is there are less married people.

Hal Weitzman: I see. I see. I mean, I'm thinking more of societal things like mobile phones and working from home and all these sorts of trends that have atomized society, and so people are less connected.

Sam Peltzman: There's that too.

Hal Weitzman: You are saying that there's a direct relationship between or correlation between the lower marriage rates and less happiness.

Sam Peltzman: Mathematically. I want to emphasize, there's no way to talk about causality that you should get married to be happy, or the other way, happy people get married. In the real world, both of these things are probably going on. All I can do is describe the differences for you. So you mentioned an atomized society. That could feed into the decline in marriage. There's no way to rule that out.

But as a matter of simple arithmetic, if you have a stable 30-point happiness premium for being married and the share of the population that is married goes down, which it has dramatically, that's going to translate and mathematically has to translate into a decline in happiness.

Hal Weitzman: But we don't know if it's marriage per se or loneliness.

Sam Peltzman: Or any of a lot of other things that are driving everything. Exactly.

Hal Weitzman: A lot of those people unmarried are not lonely. Similarly, they're in relationships, they just haven't got married.

Sam Peltzman: Yes. What's important is the magnitude of the difference. I suspected that you would find this, the difference. I was absolutely blown away, and you're talking to somebody who has crunched numbers for all of his adult life. I was blown away by the size of the difference. It is the equivalent of the difference between somebody in dire poverty and great wealth. So if you look at the income-happiness relationship, it's there. It's certainly there.

But the difference between somebody who's at the 90th percentile in the income distribution, that's only 10% of the population's richer than that individual, then you look at somebody at the 10th percentile, which is really poverty, it's the people who are living off of food stamps and government grants of one kind or another, the homeless people. If you look at the 90-10 differential on income, it's the same as the marriage-unmarriage.

Hal Weitzman: Wow!

Sam Peltzman: That's how big it is.

Hal Weitzman: So a married person living at 10th... What is it? The lowest 10th of the population in terms of income could be as happy as someone who's earning vast, who's right at the top of the income scale.

Sam Peltzman: It could be, yes.

Hal Weitzman: Wow!

Sam Peltzman: Yes, yes, if they're married.

Hal Weitzman: But as you say, this sounds like a great advertisement for marriage, but as you say, it's not.

Sam Peltzman: It does. It does.

Hal Weitzman: But you can't tell people to get married.

Sam Peltzman: I'll tell you what it really is, because you cannot infer causality for any of this. It's a big warning sign about weakening the institution and poo-pooing its importance and that kind of thing. It's a warning sign. It doesn't tell you you can't be happy if you're sick. It doesn't say anything of that sort. But in terms of policy, throwing up obstacles of one kind or another, think about the 50-year period that's been spanned by this data and this very stable differential.

What happened in the middle of that 50-year period? The divorce laws changed dramatically. It went from in 1970 being very hard to get a divorce to today where it's just fill out a form and you're divorced, barring all sorts of complications with assets and so on and so forth. But getting a divorce got very easy. And one of the arguments was, well, you have all these people trapped in unhappy marriages. And if you let them dissolve the marriage, they'll be happier.

It hasn't happened. It just hasn't happened. So that was a weakening of the institution. I'm not saying that it leads to a policy implication, but there was a weakening of the institution of marriage, which people would have thought in 1970 was a contract for life. Now it's a contract for a few years to be renewed, that kind of thing. It hasn't made people happier nor sadder for that matter.

It just hasn't affected the differential that you find in favor of marriage. And the differential, in this case, I didn't show the data except in a footnote, but it doesn't really matter very much whether you're divorced, whether you're widowed, whether you never got married. All of those categories of unmarried are zero net happiness.

Hal Weitzman: And of course, another thing that's changed since 1972 is same-sex marriage. We talked about that on the last episode.

Sam Peltzman: Yes.

Hal Weitzman: Any data on same-sex marriage?

Sam Peltzman: No, not in this. First of all, again, you're talking about something which in the general population is so rare, they haven't even adjusted the survey. They will. If they haven't already, they may have already. But same-sex marriage, it's an acquired taste. Let's put it this way. The part of the population to which it applies is tiny.

Hal Weitzman: If you're enjoying this podcast, there's another University of Chicago Podcast Network show that you should check out. It's called The Pie. Economists are always talking about the pie, how it grows and shrinks how it's sliced, and who gets the biggest chair. Join host Tess Vigeland as she talks with leading economists about their cutting edge research and key events of the day. Hear how the economic pie is at the heart of issues like the aftermath of a global pandemic, jobs, energy policy, and much more.

Okay, so the first thing that we know is that married people are happier. Let's move on to, you touched on it there, inequality. Inequality, income, sorry. But it connects to inequality actually, because I wanted to... So it intuitively makes sense that the more you earn... I mean, that's folk wisdom, right? Money does make you happy.

Sam Peltzman: Yes.

Hal Weitzman: And I think even behavioral science will tell us, money makes you happy up to a certain point. I believe it was at one time $75,000. Maybe that figure has been-

Sam Peltzman: Yes. It's nonsense.

Hal Weitzman: -Updated.

Sam Peltzman: Absolutely not in this date. When you actually ask people, it's pretty linear actually.

Hal Weitzman: Meaning that the more you earn, the happier you are.

Sam Peltzman: 50 to 100 on the income percentile is about the same as zero to 50. It doesn't stop at...

Hal Weitzman: The billionaire earning another dollar is as happy as the homeless person earning a dollar.

Sam Peltzman: I only broke it down by deciles. Moving from 80 to 90 makes you just about happier than moving from 50 to 60 or 40 to 50. But there is what an economics is known as the Easterlin paradox after Richard Easterlin who first popularized it. He wasn't the first to discover it, but he popularized it. The Easterlin paradox is... Well, I can exemplify it in my data. Look at people at the very top, the top third of the income distribution.

They are much wealthier today than they were in 1970, both because the economy has grown and because of income inequality. They're no happier today than the same group was in 1970. So getting wealthy over time, this is the paradox, doesn't make people happier. But at a moment in time or within a certain society, being at the top makes people happier than being at the bottom.

And it's not just status. Being at the top and having more money makes that group even more happier than the people at the bottom who have less money. So income inequality matters in this sense.

Hal Weitzman: So that brings you back to what was on my mind earlier about income inequality. So rising income inequality has led to rising happiness inequality.

Sam Peltzman: Here's what you can say. Here's what you can say. People at the bottom of the income distribution are more unhappy today than they were in 1970. People at the top are no more happy than they were in 1970. So the inequality is all coming from the bottom, people at the bottom.

Hal Weitzman: But it has happened.

Sam Peltzman: It has happened. Yes.

Hal Weitzman: Okay. So being wealthy, being at the top really is good for happiness and being married is good. Let's talk about politics. So you found that conservatives are happier than liberals or moderates, and this relates to a conversation we had last time with you on the podcast, but so are people who trust the government. So that's intriguing, right?

Sam Peltzman: Yes.

Hal Weitzman: So first of all, what does trust the government mean?

Sam Peltzman: Again, I'll tell you exactly what the question is. The survey asks a question which is phrased in terms of how confident are you in the people running, and then there's a list of institutions, the army, so on and so forth. There's been an overall decline in this is called the trust in institutions. How confident are you in the people running various institutions, religion, business, the government included?

That's one question. There's also a general trust question which is relevant to this discussion, which has nothing to do with institutions, but it asks... The question is phrased something like this, again, I'm paraphrasing. When it comes to other people, can you trust other people or can't you be too sure? It's one or the other. The can't you be too sures are going up quite substantially. So general trust is declining.

Trust in institutions is a big mixed picture, generally declining in business and others, not the military. The military is going up, but the two that are going down the most are how confident are you in the people running the executive branch of the federal government? So that's the president and his cabinet. The separate question, how confident are you in the people who are in the US Congress? That's dropped like a rock. It was 50-50 in 1972. It's now overwhelmingly negative, a margin of 50 percentage points negative, so 75-25, something like that.

Hal Weitzman: Okay. So how does this relate to happiness?

Sam Peltzman: You phrased it as a paradox. Conservatives on balance more happy than lib. That's true. I'm not the one who's discovered that. That's been true forever. Trusting people, happier. General trust. Trust in government, happier. That's not so much a paradox as a separate dimension.

Hal Weitzman: Well, I only say it's a paradox because you think the stereotypical conservative hates government, and so they wouldn't trust...

Sam Peltzman: That's right. That's why it seems to be a... But again, the variation in answers is enormous, and there's no real difference between conservatives and liberals and their decline in trust in government. Now, they started out at different levels. This is so big a decline that it cuts across all...

Hal Weitzman: But just to be clear, so conservatives are happier than liberals or moderates. People who trust the government or trust the institutions that you're talking about, with the government institutions...

Sam Peltzman: Think of it as what we call an additive factor. There's no correlation between trust and politics. Somebody who answers the trust question one way doesn't necessarily answer the... Even the trust in government, as I said, it cuts across all political... The decline cuts across all political...

Hal Weitzman: But if you generally have more trust, are you generally happier?

Sam Peltzman: You're happier, and it's unrelated to the political dimension.

Hal Weitzman: Okay. It doesn't matter that conservatives don't trust the government. You mentioned religious institutions though. So people who trust religious institutions I would assume are happier.

Sam Peltzman: I don't know. I could look at it. I'll tell you tomorrow.

Hal Weitzman: I mean, we'll assume that typically people who are religious are happier.

Sam Peltzman: This is much more a general characteristic of people than it is of.... If they tend to be trusting kind of people, they tend to be happier.

Hal Weitzman: Got it. So conspiracy theorists tend to be unhappy.

Sam Peltzman: They don't tend to be less happy. Yes.

Hal Weitzman: All right. So conservatives, people who are generally trusting in government and other things, tend to be happier. Okay. And now let's move on to talking about race and gender. So I noticed that in the piece that we've written up in Chicago Booth Review, we've observed that white people have reported greater happiness in this survey than Black people, but that gap appears to be shrinking because Black people in recent years, and we're talking about recent leading up to 2018, have reported increasing happiness and the levels for white people have fallen. Is that right?

Sam Peltzman: There's been a narrowing. I think I could be most helpful here by giving a big picture kind of answer. When you get into the demographics, that was one of the motives for my doing this. I was interested in how these... I knew about the decline we talked about. That piqued my curiosity. So I went to the data and I said, let's break it down by the standard demographics.

So marriage is one, age, gender, race. There's a whole list. Education we're going to get to. I hope we'll talk about education. Even where do you live? Do you live in a big city? A little city? I started breaking down by the demographics, and it's quickly apparent that there are three categories of demographics: very important demographics, consequentially important demographics, and things that people worry about too much, which are not that important.

The first category we've covered, income and marriage, stand out as very important. If we were back in 1970, race would also stand out. The 30 points for marriage, 25 points between Blacks and whites. But that has narrowed. So that race today is in the second category. Consequential, but not crucial, not very important. It's about 10 to 15 in that range and continued to narrow all throughout this period up to 2018.

You described it more or less accurately. It's Blacks happiness rising pretty steadily. Whites flat to declining, depends on the period you're looking at. And that's been steady for 50 years. That's been going on for 50 years. Ups and downs, of course, but 25 points has become closer to 10. So the other consequential variable is education. And here we've had a factor that's pushed people to become happier.

The difference between graduating from high school and graduating from college is on the order of the Black-white differential, 10 points or so. It's important. Again, it's something that I was surprised. I was surprised not the direction so much as the gap. 10 points is a lot in this kind of data and it's there. And at the same time, the population has gotten more college educated, at least over this time period.

It's flattening now in pretty much substantial way. But education attainment in 2018 compared to 1972 clearly has been a shift toward college. And without any decline in that 10 point premium, which surprised me. I mean, you're taking people who would've been high school graduates in 1972, you're giving them a college education and they're 10 points happier.

That surprised me. It wasn't the type of people that go on to college. It really is. Something happens when they... Maybe it's greater security in their careers. I don't know what it is, but it's...

Hal Weitzman: Well, it connects to income, right?

Sam Peltzman: I've done that exercise too. Even if you statistically hold income constant, everything I'm saying holds, but the numbers get smaller because you're right. I mean, people who are more educated are high... Also, they're all more likely to be married. The academics talk a good game in class, but the outside of class tend to be very standard kind of thing.

Hal Weitzman: So really what we're selling here at the University of Chicago is not an education or greater income, it's happiness. That's ultimately what it's all about.

Sam Peltzman: They're all related, but all these effects are additive. Somebody who is richer but more educated is happier on average and on and on. So we have education and race, which are very important. What isn't important is gender. It's been a lot of worry about the decline in female happiness, which is a fact. It's been going on for quite some time. But in terms of differences, it's very hard to see a very pronounced pattern of divergence between men and women.

Hal Weitzman: You mean everyone's been getting unhappier?

Sam Peltzman: Well, no, no, no, no, no. It's more complicated than that. Back in the '70s, women were happier than men, and then they converged. And then there was a period when men were happier than women, and now the men are joining the women. Statistically, that's what happened. So what's happened is there's been a gap in favor of men. There's been a gap in favor of women. The women have been declining for a long time. Small, we're talking a couple, two or three points.

But the big picture is gender's not that important. And it's not that important. Again, it's a little footnote, but it's dramatically not important in the marriage dimension. Marital happiness is not just men being happier than men who were sad and unmarried. It's women too by exactly the same amount. I'm talking 31 as opposed to 30.5 differential. So the bottom line on gender is, unless things change going forward, it's not a big issue.

Hal Weitzman: But when you add it all up, are we happier now in... Or 2018, were we happier than we were? We as a country.

Sam Peltzman: There's no way to make that kind of comparison. If you look at the answers to the test... To the question. I said test. I'm an ex-academic. But the survey question, if you look at the answer, here's the bottom line, flat from 1970 to 2000, plus 20 for the whole population. That is to say the very happy minus the very unhappy, it's a 20-point difference favoring happiness.

So by and large, the population's okay. It's pretty happy. It's now 15. Beginning in 2000, it's been drifting down. The drift stopped around 2012 or thereabouts, as best you can tell. And it's been flat at a lower level since. So big picture, 20-point premium until 2000, 15-point premium now. It's been a decline, but it's not that great.

Hal Weitzman: Okay, so we can report that we're not as unhappy as perhaps we think we are.

Sam Peltzman: Yes. I think that's a good takeaway line.

Hal Weitzman: Sam Peltzman, thank you so much for coming on the Chicago Booth Review Podcast.

Sam Peltzman: It's been a pleasure.

Hal Weitzman: That's it for this episode of the Chicago Booth Review Podcast, part of the University of Chicago Podcast Network. For more research, analysis, and insights, visit our website at chicagobooth.edu/review. When you're there, sign up for our weekly newsletter so you never miss the latest in business-focused academic research. This episode was produced by Josh Stunkel. If you enjoyed it, please subscribe and please do leave us a five-star review. Until next time, I'm Hal Weitzman. Thanks for listening.