His Recommendations

Policy Implications

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.

Work: Unemployment, Job Security, and Stress

Unemployment

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.

Job Security

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.

Stress

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.

Conclusion

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.

Summary:

What does Layard believe society needs to do?

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

Source: Richard Layard, Lecture 3