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Creative destruction and subjective well-being

Aghion, Philippe and Akcigit, Ufuk and Deaton, Angus and Roulet, Alexandra (2016) Creative destruction and subjective well-being. American Economic Review, 106 (12). pp. 3869-3897. ISSN 0002-8282

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Identification Number: 10.1257/aer.20150338

Abstract

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.

Item Type: Article
Official URL: https://www.aeaweb.org/journals/aer
Additional Information: © 2016 American Economic Association
Subjects: H Social Sciences > HB Economic Theory
JEL classification: I - Health, Education, and Welfare > I3 - Welfare and Poverty > I31 - General Welfare; Basic Needs; Living Standards; Quality of Life; Happiness
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J65 - Unemployment Insurance; Severance Pay; Plant Closings
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O38 - Government Policy
Sets: Departments > Economics
Date Deposited: 09 Feb 2017 14:22
Last Modified: 21 Sep 2017 09:14
URI: http://eprints.lse.ac.uk/id/eprint/69228

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