Happiness Research Undermines European-Style Labor-Market Regulation
Bryan Caplan persuasively pans the book he is revieiwng. But along the way Caplan makes an intriguing observation of his own:
(p. A11) . . . , happiness research makes a powerful case against European-style labor-market regulation. For most economists, the effect on worker well-being is unclear. On the one hand, regulation boosts wages; on the other, it increases the probability that you will have no wages at all. From the standpoint of a happiness researcher, however, this is a no-brainer. A small increase in wages has but a small and ephemeral effect on happiness. A small increase in unemployment, by contrast, has a massive and--unlike most other factors--durable effect on happiness. Supposedly "humane" regulations to boost workers' incomes have a dire cost in terms of human happiness.
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(Note: ellipsis added.)
