satisfaction, no doubt in part because they tend to be healthier, to have more leisure time to pursue hobbies or socialize, and to have more interesting work. generally, richer countries also have fewer citizens in severe poverty. but, again, many things beside income contribute to feelings of well - being. for example, as i mentioned, social interactions appear very important for individual happiness. one application of this insight – and this is just an example of the type of research connected with the “ economics of happiness ” that may bear policy insights – involved a program in canada in which recipients of employment insurance or income assistance were offered jobs in community development and opportunities to develop a social network. 14 being unemployed is stressful, not just because of loss of income but also because of feelings of loss of control and diminished self - worth. but individuals who participated in these opportunities reported higher satisfaction than those who did not. further study could shed light on the effectiveness of alternative approaches to traditional unemployment insurance programs. for example, see the discussion and references in helliwell and barrington - leigh, “ subjective well - being, ” note 7. for instance, see mihaly csikszentmihalyi ( 1990 ), flow : the psychology of optimal experience ( new york : harper and row ) ; and mihaly csikszentmihalyi ( 1998 ), finding flow : the psychology of engagement with everyday life ( new york : basic books ). see for example bryan caplan ( 2004 ), “ gratitude journals and loewenstein ’ s challenge, ” posting to weblog marginal revolution, july 30. for a summary of related issues and research, see helliwell and barrington - leigh, “ subjective well - being, ” in note 7. more generally, economic policymakers should pay attention to family and community cohesion. all else equal, good economic policies should encourage and support stable families and promote civic engagement. and to help people feel in control of their own destinies, policies should respect the autonomy of individuals, families, and communities to make their own decisions whenever possible, as research has confirmed the intuitive notion that individual freedoms contribute to life satisfaction. notwithstanding that income contributes to well - being, the economics of happiness is also a useful antidote to the tendency of economists to focus exclusively on material determinants of social welfare, such as the gdp. gdp is not itself the final objective of policy, just as an increase in income may not be a good enough

ben s bernanke : the economics of happiness speech by mr ben s bernanke, chairman of the board of governors of the federal reserve system, at the university of south carolina commencement ceremony, columbia, south carolina, 8 may 2010. the original speech, which contains various links to the documents mentioned, can be found on the us federal reserve system ’ s website. * * * i want to begin by thanking the board of trustees of the university of south carolina, president pastides, and this year ’ s graduates for the great honor of addressing this commencement ceremony. although i was born just across the border in augusta, georgia, i considered south carolina my home from early childhood until i married and took my first academic job after graduate school. during most of that time, my family lived in dillon, a couple of hours ’ drive from here. i have had several occasions to visit dillon and other places in the carolinas since i got into government work, and i am both amazed and proud about the remarkable economic and social progress that has occurred since i grew up here. south carolina, like america, is always reinventing itself, despite new and, it sometimes seems, ever more difficult challenges. i always find it difficult to choose a topic for a commencement talk. i am an economist, but my experience has been that people in a celebratory frame of mind are usually not that interested in an economics lecture. ( i can ’ t quite understand why not. ) instead, they are generally looking for something more personal and inspirational. so i thought i would split the difference between an economics lecture and inspirational remarks and speak briefly about what economics and social science more generally have to say about personal happiness, and what those ideas imply both for economic policymaking and the choices each of you will make as you leave college for other pursuits. why talk about happiness? well, it ’ s right there in the mission statement of the united states, the declaration of independence : the inalienable rights of americans are “ life, liberty and the pursuit of happiness. ” if thomas jefferson thought it was important to facilitate the pursuit of happiness, maybe we should think a bit about what that means in practice. in exploring the question, researchers have distinguished between two related, but different, concepts – “ happiness ” and “ life satisfaction. ” they use “ happiness ” to mean a short - term state of mind that may depend on a person ’ s temperament, but also on external factors, such as whether