Economic Change and Wellbeing

Technological progress and globalization have generated indisputable benefits, but also relevant costs, such as growing economic inequality, economic fluctuations, and financial instability. Mainstream economics has usually considered these costs as temporary, evenly distributed, and more than compensated by the gains of the phases of economic expansion. In this book, which focuses mainly (though not only) on the labor market, the authors contend that the major costs of the intensified process of creative destruction, through which economic change proceeded, have been ignored and the benefits overrated, thus incorrectly estimating the net impact of economic growth on subjective wellbeing. The book argues that the positive consequences of economic change and globalization may not compensate for the negatives, because psychological losses are felt more strongly than gains (due to loss aversion) and the costs are unequally distributed (those on low incomes disproportionately suffer more). The result is an overall reduction in wellbeing and therefore appropriate policies are necessary to allow more people to enjoy the benefits of technological progress without suffering the costs. The authors develop a comprehensive framework in which the socio-psychological context and educational level of a community determine the most suitable policies both for the short and for the long run. The book makes an invaluable contribution to the literature on economic growth and development, labor economics, the economics of wellbeing, and applications of behavioral economics. The readers that may be interested in this book are economists and other social scientists, but also general readers, since the analysis is maintained simple and accessible. University teachers can use the book for courses on economic growth and development, on labor economics, on the economics of human capital, on the economics of wellbeing, and on applications of behavioral economics.

Fabio D'Orlando is Associate Professor of Economics at the University of Cassino, Italy. His research interests are in behavioral economics, economics and psychology, technological unemployment, history of economic ideas, classical-type theory, European integration and crises. Francesco Ferrante is Full Professor of Economics. Ferrante's recent research interests include the effects of university inputs and university organization on students' achievement and graduates employability; the impact of education and social programs on the labor market; labor market institutions and macroeconomic performance; education and subjective wellbeing; the role of education in entrepreneurship and growth. Albertina Oliverio is Professor of Epistemology of Social Sciences at the University G. d'Annunzio of Chieti-Pescara, Italy and Professor of Methodology of Social Sciences at University Luiss G. Carli of Rome. Her research interests are in epistemology and methodology of social sciences; rationality and decision making; social processes, social norms and human action.

Introduction 1. Causes and consequences of economic change 2. Traditional (optimistic) theories: growth without regret 3. The true costs of economic change 4. Some recipes to increase the social return of creative destruction 5. Conclusions: looking for sustainable economic change