Past research has found that experienced well-being does not increase above incomes of $75,000/y. This finding has been the focus of substantial attention from researchers and the general public, yet is based on a dataset with a measure of experienced well-being that may or may not be indicative of actual emotional experience (retrospective, dichotomous reports). Here, over one million real-time reports of experienced well-being from a large US sample show evidence that experienced well-being rises linearly with log income, with an equally steep slope above $80,000 as below it. This suggests that higher incomes may still have potential to improve people’s day-to-day well-being, rather than having already reached a plateau for many people in wealthy countries.
What is the relationship between money and well-being? Research distinguishes between two forms of well-being: people’s feelings during the moments of life (experienced well-being) and people’s evaluation of their lives when they pause and reflect (evaluative well-being). Drawing on 1,725,994 experience-sampling reports from 33,391 employed US adults, the present results show that both experienced and evaluative well-being increased linearly with log(income), with an equally steep slope for higher earners as for lower earners. There was no evidence for an experienced well-being plateau above $75,000/y, contrary to some influential past research. There was also no evidence of an income threshold at which experienced and evaluative well-being diverged, suggesting that higher incomes are associated with both feeling better day-to-day and being more satisfied with life overall.
Does earning more money lead to greater well-being? This is one of the most enduring questions in the science of human well-being, with relevance to individuals making trade-offs between income and other life goals, employers determining wages for employees, and institutions influencing economic policy. Although an abundance of research suggests a positive relationship between income and well-being in general, at least two important and interrelated questions remain about the nature of this relationship. A first question concerns the shape of the relationship between income and well-being across income levels: Does income stop mattering above some modest threshold, or is higher income associated with greater well-being across a wide range of income levels? A second question concerns the degree to which income specifically affects certain aspects of well-being: Does income primarily affect people’s evaluations of their lives [ … ]
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