Endless Growth Does Not Bring Joy: Income Inequality, Human Development, and Happiness-A Cross-Country Analysis With a Focus on Europe

This paper explores the complex relationship between economic development, human development, income inequality, and happiness. It reveals that while GDP per capita correlates positively with the human development index (HDI) and income equality (low GINI), it does not guarantee higher life satisfaction in highly developed countries. The findings suggest that nonmaterial factors such as social cohesion, mental health, and work-life balance are more significant determinants of well-being once a certain level of economic prosperity is reached. Countries like Norway and Switzerland, despite their high GDP and HDI, demonstrate diminishing returns in terms of happiness. The research highlights the importance of limiting continuous economic growth for both environmental and human well-being. It advocates for a holistic approach to well-being, incorporating social factors alongside material wealth. Additionally, the study shows that while income inequality negatively impacts HDI, other factors like governance and health care also play a role. In Europe, the paradox of high GDP countries not reporting increased life satisfaction emphasizes the need for social policies that prioritize quality of life.