Sam Peltzman Finds 2020 Happiness Crash Unrepaired
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- Sam Peltzman analyzed the General Social Survey and found a 22.2‑point drop in the ‘very happy minus not very happy’ metric in 2020, the largest single‑year swing in the survey’s 50‑year history.
- General Social Survey data show the happiness metric, which averaged about +20 points from 1972‑2018, fell to roughly +6 by 2024, a shift from double‑digit to single‑digit net happiness.
- Peltzman calls the shift a “regime change,” arguing the underlying mechanism generating happiness scores has fundamentally altered.
- Andrew Clark and Andrew Oswald’s “aspiration gap” research is cited, indicating that satisfaction depends on relative expectations rather than absolute income, and that expanding education has widened this gap.
- Peter Turchin’s “elite overproduction” concept is invoked, noting that mass higher‑education expansion has created many credentialed but under‑employed people, fueling resentment.
- Charles Schwab’s Modern Wealth Survey reports Americans now view $2.3 million net worth as “wealthy,” a 21 % rise since 2021, while median home prices have surged >400 % since 1990, outpacing median income growth (<200 %).
Why it matters: Employers and policymakers must reckon with a productivity slump and rising health costs, as unhappy workers cost the global economy $8.9 trillion annually and the most educated—who feel the sharpest decline—are the least likely to sustain engagement. This could erode economic growth and strain social safety nets.
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