Income raises human well-being indefinitely, but the impacts gradually become marginal with higher income; age consistently slashes well-being

Income raises human well-being indefinitely, but age consistently slashes it. Chao Li & Shunsuke Managi. Scientific Reports volume 13, Article number: 5905. Apr 11 2023. https://www.nature.com/articles/s41598-023-33235-7

Abstract: The relationships among human well-being, income, and age have long been debated. The association between human well-being and income is believed to be U-shaped, although the reasons remain elusive. A recent study shows a turning point in the link between human well-being and income; that is, increased income does not always improve well-being. However, the mechanisms of the effects of income and age on human well-being are unknown. Here, we illustrate the total cumulative effects of income and age on evaluated well-being through all observed causal pathways based on a 1.6-million-observation global dataset and the structural causal model. This is the first study to investigate those casual relationships globally. We find that an increase in age always reduces evaluated well-being, and the adverse effects are aggravated with age. Furthermore, increased income continuously improves human well-being, but the impacts gradually become marginal with higher income. Our results demonstrate that physical health improvement in older people is the most effective way to intervene against the harmful effects of age on well-being. Moreover, increased income may dramatically enhance the well-being of people living close to the poverty line.

Conclusion

This is the first study to investigate the causal relationships among human well-being, income, and age using a global dataset. Intervention for gradually deteriorating health in an aging society is the most effective way to maintain or improve human well-being. While increasing age is not inherently detrimental to human well-being, it can lead to various physical and mental health issues that ultimately harm overall well-being. Additionally, the effectiveness of an increase in income is typically most pronounced when individuals initially have low incomes. Although a turning point in the relationship between well-being and income, such as 60,000 to 75,000 USD/year, regarding life evaluation was not detected, the contribution of increased income to life evaluation beyond these amounts is marginal. Increased income always leads to human well-being improvement because its effects on the direct and indirect factors are always positive in most pathways observed in this study.