Logic of Proposals
• In this light Layard's proposal to tax income from work, in order to help people preserve a balance between their work and their life, is somewhat premature and drastic. Premature since income inequality has no substantial negative effect on happiness and too drastic since problems in the balance of work and life are usually rather specific and related to temporal overload. Such problems require more flexibility and individualization in the division of work; this can be achieved by specific policies. The Scandinavian countries and the Netherlands have some interesting legislation in this respect. In the Netherlands employees - men and woman - are for instance entitled to maternity leave, parental leave, emergency leave and adjustment of working times. • Layard's other proposals (2/5) are more convincing. Performance related pay is an old-fashioned carrot-and-stick approach; outdated in a modern economy where knowledge has become a key-factor for productivity. Advertising has become a real intrusive nuisance in western societies with negative effects on happiness from stimulating extrinsic motivation and materialism at the expense of intrinsic motivation.
All in all Layard seems to be a bit too pessimistic about happiness in rich nations. Perhaps the increase in
happiness is low compared to the increase in wealth in the last 50 years but we should appreciate - at least! - two
facts: the level of happiness in very high? and the relationship between income and happiness has become rather
loose. Politicians should cherish this distance between income and happiness and further increase it. In addition to
that, happiness probably requires the identification and tackling of specific problems; like work overload, mental problems, performance related pay and advertising. Despite some pessimism and some selectiveness in research interpretation, Layard has made a strong argument in favor of an evidence-based utilitarian policy approach.