America has experienced strong economic growth while becoming less satisfied with its political system, social prospects and ability to shape its own lives, according to a study led by economist Carol Graham. The United States is described as the most extreme example of what the researchers call the “paradox of unhappy growth”.
Graham, a senior fellow at the Brookings Institution and professor at the University of Maryland’s School of Public Policy, said her work had increasingly shifted from measuring happiness to examining despair.
“I used to work on happiness and I seem to work more on despair now,” she said. “So that’s not great, but that’s the state we’re in.”
The paper, written with Douglas Harris, Anjana Nair and Isabel Shaheen O’Malley, draws on Gallup World Poll data from 44 middle- and high-income countries between 2006 and 2024.
Over that period, trust in the US government fell by 31 percentage points, while trust in the courts dropped by 24 points. The proportion of Americans who felt free to choose how to live declined by 19 points.
The researchers found that rising incomes translated into wellbeing less effectively in the US than in the average country studied. They also described America as the most politically polarised democracy in the developed world.
By 2024, just 12 per cent of Democrats and 52 per cent of Republicans said they were satisfied with the country’s system of government.
The American happiness decline
Graham said the findings reflected a wider problem with the country’s vision of individual success. She argued that poverty could be more painful in a wealthy society where people are expected to rise through effort alone.
“Poor people in Latin America are much more hopeful than poor people in the U.S.,” said Graham, who was born in Peru and began her career in development economics. “And I’ve concluded that it’s harder to be poor in a very rich country where you’re sort of stigmatized.”
She said the American Dream could turn economic hardship into a perceived personal failure, leaving little room for the role of chance or broader social conditions.
“So if you fall behind and you’re poor, it’s your fault because you didn’t work hard to get ahead,” Graham said. “Nobody ever talks about bad luck.”
The study’s authors linked the decline in wellbeing partly to what they called “a deeply rooted culture of individualism and distrust of social support”. They said the US had a “thinner social contract” than comparable countries, reflected in the unequal distribution of hope.
Graham said she had first observed a similar pattern in China, where life satisfaction fell sharply during the early stages of rapid economic growth. The disruption caused by the transition, including rising inequality and changed lifestyles, coincided with a surge in suicides, she said, although the suicide rate later fell as the most dramatic phase ended.
She believes the American version has unfolded more gradually. The US has outgrown almost every other wealthy country for two decades, she said, while inequality has steadily increased “to the point that it’s corrosive”.
Those left outside the statistics
Graham’s research has also focused on prime-age men who have left the labour force and are often absent from standard economic measures. In earlier work with Sergio Pinto, she found that men outside employment were “very unhappy and very pessimistic” and disproportionately represented among opioid users.
Many, she said, remained in their parents’ basements or in the same census tract. Without a university degree, their prospects of securing a good job were often limited, while a lack of employment also made it harder to move to areas where work was available.
Graham said this group helped explain the gap between headline economic figures and people’s lived experience. “The macroeconomists go on and on and on about how strong the labor market is,” she said, while many Americans felt their lives were “so far from what the numbers are telling”.
She connected that frustration with the rise of populism in the US and elsewhere, arguing that many people believed the system was failing them even if they were not destitute or entirely without work.
“It’s leaving them without hope,” she said.
Hope and recovery from adversity
Graham distinguishes hope from happiness and optimism, describing it as involving a sense of agency and what she calls an “internal locus of control”. Research she conducted with Redzo Mujcic of Warwick Business School followed 25,000 Australian adults for 14 years.
People with higher levels of hope later recorded better outcomes in health, education and employment. They were also less affected by negative events and recovered more quickly and more fully when adversity struck.
“It turns out it’s incredibly consistent,” Graham said. “And so I think life satisfaction has a bit of that.”
Not all economists agree that the American mood reflects a deterioration in material conditions. Philipp Carlsson-Szlezak, global chief economist at Boston Consulting Group, has argued that expectations may have become detached from reality.
He and his co-authors found that, since 2020, wage growth among the bottom quarter of earners had outpaced that of the highest earners in nearly every year, while wealth gains had been broadly proportional across income groups.
Other data presents a different complication. Retired University of Chicago economist Sam Peltzman found that the fall in American happiness in 2020 was greatest among the highly educated and wealthy. Graham said comparisons were difficult because the General Social Survey offered only three response options, while Gallup used a scale from zero to 10.
On that broader scale, the Brookings analysis found that the proportion of Americans rating their lives between seven and 10 had barely changed, even as the average score fell more sharply.
“Many Americans continue to be quite satisfied,” Graham said, “others are increasingly unhappy.”
