His Recommendations

Within his section on Policy Implications, Layard shows the contrast between happiness and economics. He criticizes economic policy for not putting happiness as the main goal. He believes we have a lot to learn from "old Europe" where there was less of a focus on productivity and performance, and more on stability and happiness.

He is highly critical of certain aspects of American society, such as the great focus on performance, high levels of stress, job insecurity, and high level of geographical mobility which leads to high levels of criminality and a breakup of families and communities.

Layard is highly critical of policies that are adopted because they increase GDP, even though they may have other effects on happiness which are negative. (Layard, 7)

Work: Unemployment, Job Security, and Stress

It is widely accepted that unemployment is generally a disaster for a person. Layard believes that the biggest impact of unemployment is on a person's happiness. When a person loses their job, they cease to feel productive and needed by society. Economists, in contrast, do not consider the impacts of unemployment on happiness. They measure the loss of unemployment as the loss of income to society. Layard believes low unemployment should be a key goal for any government. He believes that any job is better than now job. Layard believes strongly in welfare-to-work.

A desire for security is a central part of human nature. As a result, people are also happier when they have job security. However, again, there is a contrast between happiness and economics. Many economists support job flexibility and mobility. Layard argues for collective action (including legislation) to improve job security.

Another important aspect of work that affects overall happiness is the pace of work. The greater the pressure to acheive targets, the higher the stress levels of a person. Layard gives an example from the Eurobarometer survey in 1996. This survey asked people in every country whether in the last 5 years there had been a "significant increase in the stress involved in your job." Close to 50% said Yes, the stress had increased, and under 10% said it had decreased.

Layard believes our society is too focused on performance and productivity, ignoring the more basic need of happiness. He believes society needs an overall change in cultural priorities. Performance needs to be "put into its proper place," and happiness needs to become the number one goal of society.

According to Layard, there is a dichotomy between increased insecurity and stress as we get richer. Layard believes that as incomes increase, people should have more security and a quiet mind, not vice versa. Anglo-American society values novelty. However, Layard believes we have a lot to learn from "old Europe," where, according to him, the value of secuirty was better understood.

Secure Families and Communities

Layard is highly critical of high levels of geographical mobility. He acknowledges the reason why economists generally favor geographically mobility: it moves people from places where they are less productive to ones where they are more productive. However, it also has a number of negative consequences for happiness, particularly on family and on criminality. First, geographical mobility increases family break-up. If people stay in one place, they are less likely to break up, because they "have a network of social support, which is less common in more mobile situations." (Layard, 7) Second, greater geographical mobility leads to increased crime. Layard points to studies that have shown that crime is lower when people trust each other, and "people trust each other more if fewer peopel are moving house and the community is more homogenous." (Layard, 7). Layard states that one of the greatest failures of modern society is the growth of crime. Thus, the costs of mobility must be taken into account when policy makers decide on policies that affect geographical mobility.

Mental and Physical Health

Layard states that most of the worst unhappiness is caused by mental disorders, particularly depression and schizophrenia. He believes it is a complete scandal that society does no spend more on mental health.

Political and Personal Freedom

Layard describes that there are at least three dimensions to freedom: 1. Political influence (on government policy) 2. Political freedom (free speech) 3. Economic freedom (freedom to do business.)

Each of these factors influences a person's happiness. Layard states a study by Bruno Frey, who did a study of the impact of political freedom on happiness in Swiss cantons. He compared happiness in those Swiss cantons with the most frequent referenda with happiness in those cantons with the least frequent referenda. They difference in happiness was roughly equal to the effect of a doubling in income. Layard highlights the necessity for reconsidering local democracy.

Conclusions

What does Layard believe society needs to do?

1.) provide reasonable job security 2.) welfare-to-work

Source: Richard Layard, Lecture 3