Application of the Easterlin Paradox to Leisure Time on Korean Career Women

I. Introduction

Will personal happiness increase with increasing income? The question of the relationship between income and happiness is still valid and arguments regarding this question are continuing. Happiness can be defined as ‘Whole Life Satisfaction (Brandt, 1967; Tatarkiewicz, 1966; Telfer, 1980).’ Generally, economists understand personal happiness through the income function and they assume that happiness will increase with increasing income. However, Easterlin (1974; 1995; 2001; 2010), an economist, had a different view and proposed the Easterlin paradox based on the relative income hypothesis. The Easterlin paradox proposes that when income reaches a certain point, happiness does not increase with further increases in income. The argument of Easterlin paradox is has been refuted by several scholars (Hagerty & Veenhoven, 2003; Stevenson & Wolfers, 2008; Veenhoven, 1991 etc.).

Although the arguments are continuing, various studies aimed at determining the relationship between leisure activity and happiness have been conducted (Bailey & Fernando, 2012; Lu & Hu, 2005; Ragheb & Griffith, 1982; Wang & Wong, 2014). In particular, Ragheb & Griffith (1982) examined the types of leisure activities and reported that the satisfaction level of leisure time spent for sports and travels is much higher than that of other leisure activities and the satisfaction level positively impacts happiness. They reported that the satisfaction level of leisure time mediates the relationship between leisure activities and happiness. Studies conducted in the field of leisure study insisted that happiness keeps increasing with increasing leisure time (Argyle, 1996; Chae, Han, 2002; Kim, Choi, 2006; Lu & Hu, 2005; Wang, Orpana, Morrison, Groh, Dai, & Luo, 2012). On the other hand, most of those studies examined the linear relationship between the leisure time and happiness using regression analysis as their methodology. Therefore, those studies have a limitation in determining any non-linear relationships between leisure time and happiness.

According to the OECD (2013), the happiness level of Koreans ranked 27th among 36 OECD countries while Korea had the highest suicide rates and women’s depression in the world, which clearly indicate that the mental health of Koreans is under threat. In particular, Korea has a wider gender wage gap than other OECD countries as the wage of Korean working women still remains at two third of that of Korean working men (Korea Labor Institute, 2014). Those statistics indicate that the happiness level of Koreans is not high in accordance with increasing income along with Korean economic growth and that the Easterlin paradox can be applied in the situation. Moreover, it was reported that Korean working women are disadvantaged in their workplaces due to pregnancy, maternity leave, etc. (Rowan, 2000).

According to the statistics of the telephone consultation for equality reported by Korean Women Workers' Association United (2014), the rate of consultation on disadvantage due to pregnancy, and maternity leave has increased constantly from 13.6% in 2003 to 42.7% in 2013. In addition, Korean women are discriminated in working conditions in relation to promotion, unfair dismissal, overtime work, and they suffer from sexual harassment, gender discrimination, violent language, assault, etc. in their jobs. Accordingly, given the discriminating job environment, it is applicable that the Easterlin paradox, which is a phenomenon that the increase in happiness level reaches a plateau at the satiation point of income, can occur in the relationship between happiness and incomes of Korean working women. Furthermore, the fact that telephone consultation on disadvantages, including unfair dismissal and employment discrimination due to pregnancy, giving birth, and maternity leave of married women, reached up to 84.6% of the telephone consultation cases, suggests that the Easterlin paradox will certainly occur in Korean working women. This also indicates that the relationship between income and happiness can differ according to environmental factors, such as marital status.

Therefore, in this study, the authors examined the Easterlin paradox in terms of the relationship between incomes and happiness by targeting Korean working women. We thereafter expanded application of the paradox to leisure activities to determine if the Easterlin paradox occurs in the relation between leisure time and happiness. Given the situation that the female employment rate in Korea is up to 48.7% (Korean Statistical Information Service, 2014), this research targeting Korean working women and examining the Easterlin paradox in the relationship between income and happiness and the relationship between leisure time and happiness of women is meaningful as a signpost for the leisure policy. In addition, this research will have meaningful implications for formulating a leisure policy that promotes happiness in the consideration of the Easterlin paradox in leisure contexts.

Ⅱ. Research Questions

This research aimed to substantiate Easterlin’s paradox in regard to the correlation between happiness and earnings as the employment of working women in Korea increases. Specifically, as discussed previously, in the situation of a lack of an established correlation between happiness and earning, this research aimed to substantiate whether Easterlin’ paradox applies.

Women are discriminated in the labor market because they are the ones who become pregnant, give birth and raise children considering the Korean culture and suffer from the relatively low wages compared to men and sexual discrimination, harassment, and verbal abuses. Accordingly, research questions (Research Question 1) regarding the correlation between earnings and the happiness of working women in an exclusive Korean society were set up as follows.

• 1. Are there any changes in the feeling of happiness as earnings of Korean working women increase?
• 1-1. What are the correlations between earnings and the happiness of working women?
• 1-2. Depending on the marital status, are there any changes in the feeling of happiness in relation to earnings?

In addition, this study was extended to determine if Easterlin’s paradox applied in regard to the correlation between the leisure activities and happiness. Research regarding the correlation between the leisure activities and happiness (Argyle, 1996; Lu & Hu, 2005; Wang, Orpana, Morrison, Groh, Dai, & Luo, 2012) showed that more leisure activities led to a greater feeling of happiness. On the other hand, it is unclear if there is a correlation between the leisure activities and happiness in reality because previous research showed the result only graphically. Accordingly, to determine if Easterlin’s paradox worked regarding the correlation between the leisure activities and happiness, authors set up research question 2 (Research Question 2) as follows.

• 2. How will the feeling of happiness change depending on the increase in leisure activities?
• 2-1. What are the correlations between the leisure activities and the happiness of working women?
• 2-2. What are the correlations between the leisure activities and the happiness of working women depending on their marital status?

Ⅲ. Method

Ⅳ. Results

1. Reliability & Validity

CFA (Confirmatory Factor Analysis) was performed to validate the reliability of the measure of happiness, which is the major dependent variable of this study. The result of CFA showed that the model fit (χ2=66.12, χ2/df = 2.76, CFI = .98, TLI = .97, NFI = .97, RMSEA = 0.06), the level of standardized regression weight (all the values were ≥ .5), and the significance level of standardized regression weights (all p < .1) were at the satisfactory level. In general, the convergent validity is determined to be present when the average variance extracted (AVE) is greater than or equal .5, and the discriminant validity is determined to be present when the AVE is larger than the square of the correlation coefficients among the variables (Fornell & Larcker, 1981). As shown in <Table 1>, the AVE of all variables were above this standard. Therefore, the convergent validity was secured for the variables included in this study. On the other hand, the largest correlation coefficient between the variables was the one between the life satisfaction and positive emotion (.501), and it was determined that discriminant validity had been secured because all the AVE values were larger than .251; the square of the correlation coefficient was .251.

Table 1.

Reliability & Validity Test

To analyze the validity of the questions used to measure the variables in this study, Cronbach’s a coefficient, which evaluates the internal consistency among variables, was calculated. The Cronbach’s a value of each variable was greater than or equal to .8, as shown in <Table 1>. Additional analysis based on a calculation of the construct reliability (CR) showed that this value was greater than or equal to .5 for all variables, as shown in <Table 1>. Therefore, the validity of the measurement tools was confirmed (Hair, Anderson, Tatham & Black, 1998).

2. Change in Happiness Index by Income

ANOVA was performed on the entire sample to examine the change in happiness depending on the family income level using the fmaily income level as an independent variable and happiness as a dependent variable <Table 2>. The analysis revealed the happiness index to be the lowest in the group with an ‘income lower than $2,000’ (M = 3.63) and was highest in the group with an ‘income between $4,000 and $4,999’ (M = 3.83). Specifically, as shown in <Figure 1>, although the average happiness increased by .15 when the income was increased from interval A to B, the level of the increase in the average happiness from income interval B to E was smaller than from interval A to B or the average happiness even reduced. This shows that the increase in happiness is not absolutely proportional to the income level <Figure 1>.

Table 2.

Mean and Standard Deviation of Happiness according to Income

Figure 1.

Transition of Happiness according to Income

On the other hand, the analysis after classifying the groups based on the married status showed that the difference in the level

of happiness between the groups of married, working females (Mmarried=3.85), and the group of single, working females (Munmarried=3.72) was largest in the income interval “D”, but the increase in happiness level was not proportional to the increase in income level when the entire income interval was taken into consideration. In particular, in the group of single, working females, when their income was greater than or equal to $2,000, the level of happiness notably stagnated, even when income was increased <Figure 1>. In summary, the Easterlin’s paradox was observed in the relationship between the income and happiness of working females in Korea.

3. Change in happiness by leisure time

ANOVA was performed to examine the change in the level of happiness according to the leisure time using leisure time as the independent variable and happiness as the dependent variable <Table 3>. The analysis

Table 3.

Mean and Standard Deviation of Happiness according to Leisure Time per Day

showed that the level of happiness was lowest in the group with ‘below 1 hour’ of leisure time per day on average (M = 3.60) and was highest in the group with ‘above 4 hours’ of leisure time per day on average (M = 3.92). As shown in <Figure 2>, the level of happiness showed an increasing trend with increasing leisure time.

Figure 2.

Transition of Happiness according to Leisure Time per Day

On the other hand, an analysis of the level of happiness according to leisure time after classification of the groups based on their married status showed different patterns in the change in the level of happiness between the group of married, working females and the group of single, working females. The group of married, working females showed a decrease in the level of happiness in the “C” interval of leisure time, but overall, the level of happiness increased with increasing leisure time <Figure 2>. In contrast, in the group of single, working females, the level of happiness increased with increasing leisure time from the group of ‘below 1 hour’ (M = 3.50) to the group of ‘between 2 and 3 hours’ (M = 3.81), but the level of happiness did not increase proportionally with increasing leisure time from the group of ‘between 2 and 3 hours’ (M = 3.81) to the group of ‘above 4 hours’ (M = 3.84) <Figure 2>.

Overall, it appears that the level of happiness increases proportionally with increasing leisure time. On the other hand, classification of the groups based on the married status demonstrated Easterlin’s paradox phenomenon in the group of single, working females. In particular, married, working females showed an increase in the level of happiness with increasing leisure time, but single, working females did not show an increase in the level of happiness corresponding to an increase in leisure time after a certain leisure time was procured. These results suggest that Easterlin’s paradox can be applied to leisure and culture studies. The observation that the level of happiness an individual feels varies according to the environmental characteristics of the individual, such as leisure time, should be noted in the field of leisure and culture studies.

In addition, from the viewpoint of relation goods, these results suggest that married, working females feel a relatively high level of happiness upon an increase in leisure time compared to single, working females because the amount of time they can spend with meaningful people, namely family members, increases, which leads to an increase in the opportunities to participate in the production and consumption of relation goods. In contrast, single, working females cannot participate in the generation of relation goods with meaningful people even when the leisure time increases unless they actively participate in leisure activities; consequently, the increase in happiness is stagnated. Such interpretations are consistent with the arguments of Ragheb & Griffith (1982) in that active participation in leisure activities, such as sports or travel affects happiness to a larger extent than less active leisure activities, such as watching TV. The reason is that utilizing increased leisure time on active leisure activities, such as sports or travel, rather than on less active leisure activities, such as watching TV, extends the opportunities to participate in the generation and consumption of relation goods. Therefore, research question 2 is meaningful for demonstrating that the application of Easterlin’s paradox can be extended from economics to leisure and culture studies.

Ⅴ. Discussion

The Easterlin Paradox has stirred continuous debate and this study examined whether or not his theory applies to working Korean Women. Although the central tendency of Korean women’s hiring rate is increasing gradually. The employment benefits to these women remains unfair. In addition, the employment benefits to women who are pregnant, have delivered a child or in need of infant care remain inconsiderate and most of these working women are asked to work under the unfair circumstances. Many economists have stated that economics has a significant effect on happiness. Therefore, if the labor market has increased then the level of the happiness would also increase, but this may not necessarily be and it might depend on the discrimination of these women at their work site.

In addition, the authors also compared if the Easterlin Paradox, which was discussed prominently in economics, can show its relations between leisure and one’s well-being. The leisure department have done their research based on the correlation of leisure and one’s happiness, and they concluded that participating in a leisure activity can improve the level of one’s well-being. On the other hand, looking into the perspective of the two relationships, it can also predict that the two might not have a direct influence of the increase. Furthermore, the research in regards to the leisure activities increasing the level of happiness was mostly done by linear relations, which can cause difficulty and limit the nonlinear relations of the two. Therefore, this research was based on one method that was handled in the Easterlin Paradox, which is linear relations, and have set the research study in relation to two fields: leisure and happiness, and marriage and happiness. According to the research, it was proven that working women with a higher income than the norm did not show a corresponding increase in happiness. Furthermore, the change in the level of happiness in the usage of leisure time showed that in single women, even if their spending time increased, after reaching a certain level, their happiness level did not increase even if they spent more time on leisure activities.

In particular, the first research is proving that if Easterlin Paradox theory applies to Korean Working Women based on one’s income to their happiness. When one’s income has reached a certain level, even if their income increased, their happiness level in relation to that income raise did not show a corresponding increase. In addition, when looking deeper into marriage and happiness, similar results were obtained, which proved that their level of happiness did not increase once it had reached a certain level. These results can support the on-going debate in regards to the Easterlin Paradox, i.e., the level of happiness and well-being increases up to certain level but once it reaches that level, the circumstances to well-being, particularly in one’s income, is minimal. On the other hand, previous research was based on the income and happiness correlation. The present research was based on one specific group, which is aimed at working women.

The second research issue was to determine if the Easterlin paradox would occur despite the change in the level of happiness depending on the leisure time by extending Easterlin paradox in the context of leisure studies. According to the research result, when the target was all groups regardless of their marital status, a linear relationship, i.e. the level of happiness increases in proportion to increasing leisure time, was observed. Nevertheless, when the group was classified according to marital status, the Easterlin paradox was applicable to single career women. In particular, the level of happiness increased until the leisure time was 3 hours, but the increase in happiness stagnated in the section of more than 3 hours in leisure time. Therefore, as mentioned above, the reason why there is a difference between married career women and single career women regarding the change in the level of happiness depending on leisure time can be explained in terms of the study of relational goods. That is, if the leisure time increases in more than a certain time, the time to be isolated alone can increase in the case of single career women. Although the leisure time of women increases, they are more likely to spend their leisure time individually because they prefer physical activities using private equipment at home rather than outdoor physical activities due to safety (Soltani & Hoseini, 2014).

In other words, the rise in happiness stagnates for them because they have limited opportunities to participate in the production and consumption of relational goods for meaningful people, such as a friends and family more than married career women. Ryff (1997) reported that the main factors that predict the happiness of a person's present and future are the level of education, occupation, relationship with a family and friend and a leisure life, particularly for the relationship with meaningful people, such as family and friends, which is the most important factor for adults. In addition, with regard to research related to happiness conducted in the field of original leisure studies (Kim & Lee, 2011; Lu & Argyle, 1994; Ragheb & Griffith, 1982; Wang & Wong, 2001), they considered leisure time as having a linear relationship with a positive effect on happiness. In the present study, however, not all the relationships between leisure time and happiness were linear, depending on an individual special situation.

This research result has the following implications. First of all, it is very suggestive in the way that it can raise a question about the linear relationship between leisure time and happiness, which has been accepted generally. Secondly, the Easterlin paradox was an explanation about the relationship between income in a country and happiness on a macro perspective. In this research, however, by applying the relationship to a special group, such as married career women, the study identified that the application of the Easterlin paradox can be extended by verifying that the paradox can affect the group in the same way. Thirdly, the result has important meaning because it suggested a new research issue regarding the relationship between leisure and happiness in the field of leisure studies by applying the Easterlin paradox discussed in an economic perspective to the field of leisure extendedly. Finally, in establishing a policy for enhancing a welfare system for career women, it is essential that the research proposes the necessary for a change in policy from increasing incomes to a policy of expanding production and consumption of relational goods.

Ⅵ. Limitation

The study was exploratory in verifying whether or not the Easterlin paradox would be observed in the relationship between leisure time and happiness as well as income and happiness. Several important results could be proven regarding the relationship, as mentioned above, but some limits were found.

First, the object of the study was restricted to Korean career women. Blanchflower & Oswald (2005) reported that generally men feel happier than women according to the result of the study regarding happiness. Therefore, there is a limit in generalizing the results of a study focusing on Korean career women, and a study of diverse groups, such as men, housewives etc., will be needed.

Second, this study focused on the marital status with the relationship between leisure time and happiness as well as income and happiness. On the other hand, happiness is influenced by a variety of factors(e.g., age, number of children, etc.) with regard to precedent studies. Friedrich Hayek (1899-1992), an economist from Austria, reported in his book, The Road to Serfdom, that the welfare and happiness of millions of people could not be measured using only one way (Hayek, 1994). Indeed, the studies related to happiness have been referring to diverse factors that decide happiness: a personal factor (feeling, heredity), a situational factor (health, a marriage), a demographic factor (gender, age), an economical factor (income level, unemployment, price), an institutional factor (an operating system of society) etc.. (Kim, 2009) Accordingly, research on the factors that affect happiness will be required to determine if the Easterlin paradox holds.

Finally, cross-sectional data was used to examine the relationship between not only income and happiness, but also leisure time and happiness. This is because there is no database on incomes, leisure time, and happiness for Korean career women, and it is difficult to access the longitudinal data. Consequently, a continuous database about the factors affecting happiness for Korean career women will be needed, and a follow-up study should be conducted using these longitudinal data.

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