Abstract

There has been increasing interest in the so-called ‘resource curse’: the tendency of resource-rich countries to underperform in several socio-economic outcomes. More recently, several papers have looked beyond the traditional impact on economic growth and instead focused on the effects upon broader human welfare indicators. A separate empirical literature in recent decades has probed into the determinants of happiness and subjective well-being (using either country or household data). Our paper contributes to the literature by bringing these two empirical strands of research together. This is the first study, to our knowledge, that makes use of a large panel dataset to explore the links between changes in happiness across countries and several measures of resource wealth. Consistent with prior empirical evidence of a resource curse in oil-rich nations, we find that oil rents are negatively linked to improvements in happiness over time. This happiness ‘resource curse’ curse appears to be oil-specific and holds both for the levels as well as changes in happiness.

Highlights

  • In recent years there has been a burgeoning literature researching the links between resource abundance and several measures of economic performance

  • Consistent with prior empirical evidence of a resource curse in oil-rich nations, we find that oil rents are negatively linked to improvements in happiness over time

  • In parallel a separate empirical literature in recent decades has probed into the determinants of happiness and subjective well-being

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Summary

Introduction

In recent years there has been a burgeoning literature researching the links between resource abundance and several measures of economic performance. Much of the so-called resource curse literature has developed theoretical and empirical research explaining the negative correlation observed between several measures of mineral wealth and long-term. Our paper contributes to the literature by bringing these two empirical streams of research together This is the first study, to our knowledge, that makes use of a large panel dataset to explore the links between changes in happiness across countries and several measures of resource wealth. Consistent with prior empirical evidence of a resource curse in oil-rich nations, we find that oil rents are negatively linked to improvements in happiness over time This happiness ‘resource curse’ curse appears to be oil-specific and holds both for the levels as well as changes in happiness.

A Theoretical Note on Happiness and the Resource Curse
Happiness and the Resource Curse: A Brief Literature Review
Happiness and Resource Wealth
Happiness and Income
Other Correlates
Data and Estimation
Results and Discussion
Resource Abundance
Non‐linear Resource Effects
Growth‐Income Interaction
Endogeneity Issues and Some Additional Robustness Checks
A Synthesis of Results
Happiness Levels and Resource Wealth
Conclusions

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