Creative destruction and subjective well-being

 

By: Philippe Aghion ; Ufuk Akcigit ; Angus Deaton ; Alexandra Roulet
In this paper we analyze the relationship between turnover-driven growth and subjective well-being. Our model of innovation-led growth and unemployment predicts that: (i) the effect of creative destruction on expected individual welfare should be unambiguously positive if we control for unemployment, less so if we do not; (ii) job creation has a positive and job destruction has a negative impact on well-being; (iii) job destruction has a less negative impact in areas with more generous unemployment insurance policies; and (iv) job creation has a more positive effect on individuals that are more forward-looking. The empirical analysis using cross sectional MSA (metropolitan statistical area)-level and individual-level data provide empirical support to these predictions.
JEL: I31 J63 J65 O33 O38
URL: http://d.repec.org/n?u=RePEc:ehl:lserod:69228&r=ltv
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