This originally appeared on Forbes on March 15, 2023.
A famous study by renowned behavioural scientists Daniel Kahneman and Angus Deaton found that broadly speaking, more money doesn't make one happier once income reaches between $60,000 and $90,000. Granted, those figures don't account for inflation rates between now and when the study was conducted in 2010, but it provides a good rule of thumb. The magic number for happiness that many are familiar with is $75,000. That's because that was the number which was widely quoted in headlines from the likes of The Wall Street Journal and Time. However, that figure was used simply because it was the midpoint of the range.
Kahneman and Matthew Killingsworth have just published a new paper in PNAS where they jointly analyze the data from the 2010 study and a 2021 study by Killingsworth that contradicted the original findings. What did they learn? That happiness does level off at a certain income point — but only in the least happy 20% of the population.
For the rest of us, more money does equal more happiness. With the spotlight on the gender pay gap in March for International Women's Day, it's important to point out that denying women the compensation they are entitled to not only sets them back financially but also could impact their happiness. Given the clear career link between happiness and performance, women could fall even further behind professionally if companies do not continue to work toward closing the gender pay gap.