Creative Destruction and Subjective Well-Being

Journal article: 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.

Author(s)

Philippe Aghion, Ufuk Akcigit, Angus Deaton, Alexandra Roulet

Journal
  • American Economic Review
Date of publication
  • 2016
Keywords JEL
I31 J63 J65 O33 O38
Keywords
  • Well being
Pages
  • 3869-3897
Version
  • 1
Volume
  • 106