Richard Easterlin, Distinguished Fellow 2006

Richard Easterlin is a remarkable economist, as well as a gifted historian, demographer, and psychologist. Over a long and active career, he has made enduring contributions by fusing insights from other disciplines with fine economic analysis. He has combined unwavering attention to quantitative evidence with an insistence on using theory to interpret observed patterns.

Among Easterlin’s early contributions is an explanation of the “booms and busts” in American fertility after World War II. He argues that imperfect substitutability between experienced and inexperienced workers made earnings depend on cohort size. Meanwhile, fertility depended on earnings relative to aspirations. The joint effects of these relationships is that baby boomers, whose wages were depressed relative to those of their parents, postponed marriage and had fewer children.

His work on economic growth emphasizes how achievements of the last century and a half, and accompanying changes in life expectancy, health, and education, mark sharp breaks with previous trends. Easterlin argues that the principal cause of sustained inequalities across nations lies in institutional obstacles to the diffusion of new technologies, and that historical declines in mortality came, not from a “beneficent market,” but from collective action on public health. Over the next century, he predicts, convergence in life expectancy and health will be more rapid than convergence in per capita income.

One of his most famous findings is that economic growth has not led to improvements in happiness. This “Easterlin paradox” has stimulated an enormous amount of research. The paradox casts doubt on the premise that economic growth is necessarily desirable. It also questions simplistic concepts of life satisfaction.