Does income matter for children’s happiness?

Gundi Knies is Research Fellow at the ESRC-funded Research Centre for Micro-Social Change and Understanding Society, both based at the Institute for Social and Economic Research at the University of Essex.

Children’s response to economic hardship

As a teenager I read that children living in households affected by unemployment showed socio-psychological responses to their family’s economic hardship that were similar to their parents’: They had more headaches and were sadder, and – like their parents – they felt ashamed and tried to hide their economic hardship from others. They did not feel like they belonged.

This had a profound impact on me. At university, I learned about poverty and social exclusion and was impressed by the government of the time’s ambitious pledge, in 1999, to end child poverty by 2010. Child poverty rates in Britain had been among the highest in OECD countries, and the newly implemented policies looked well placed to address a great deal of the issue. Excellent news!

The link between child poverty and children’s happiness

Child poverty rates did indeed half over the period 1999-2008. Yet, despite this, children in the UK came out at the bottom of the league table of subjective, or self-reported, wellbeing. Was there perhaps no link between children’s material and subjective wellbeing after all?   

I had come across numerous studies that suggest that income matters for happiness, albeit based on research with adults. The small number of quantitative studies on children’s happiness did not corroborate the association. What’s more, most of the studies had taken place in the classroom, which means children were from similar backgrounds, the income measures were much cruder than those used in research with adults, and many aspects of life that may be correlated with both income and happiness – such as the community context and health – were not considered.

With the arrival of data from interviews with around 5,000 children aged 10-15 taking part in the first wave of Understanding Society it was possible to provide evidence on the association between children’s life satisfaction and material well-being using a more comprehensive modelling framework. The empirical results did not suggest an association between income and children’s happiness.

Instead, it suggested that children may be receptive of more visible aspects of their material situation, and that they are unhappier than their more well-to-do peers if they cannot afford to enjoy goods and activities perceived as necessities by a majority of the population, such as holidays and school trips.

But then things got tougher

Sincce the Great Recession in the 2000s, child poverty rates in the UK have been on a steep rise again and a number of programmes designed to address structural disadvantage from the early years were phased out. I decided to revisit the question of whether income matters for children’s life satisfaction.

This time I considered even more aspects of children’s living circumstances that may explain why some children are happier than others. This included the neighbourhood context and school holidays. Most importantly, I could take advantage of more powerful longitudinal data.

We followed the same children over a period of up to five years, it was possible to show that:

  • richer children tend to be more satisfied with life than their less well-off counterparts (just like adults)
  • it mattered more the poorer the child is
  • at every point in the income distribution, older children (so, those aged 13-15, but not those aged 10-12) got happier when their family improved their income position over time, and vice versa
  • children are unhappier if they are excluded from perceived necessities, such as holidays and activities with friends due to their family not being able to afford it.

We should also bear in mind that children have a limited ability to notice the exact income of their family, so it is difficult to identify an effect of income changes on children’s happiness.

Increasing income is only part of the story

Income does matter for children’s happiness. But the income effects were small and we may conclude that maximising wellbeing in this age group means more than simply increasing their family’s income. Of course, this only applies to the effect on how children and young people rate their own wellbeing; there may well be bigger effects on structural outcomes!

On the other hand, as more and more children find themselves at the bottom of the income distribution, where extra money is appreciated the most, income may become more important to children’s rating of their own happiness. 


What’s the wellbeing problem with problem gamblers?

Ian Walker, is an economics professor at Lancaster University and recently co-authored new research on problem gambling. Here, he shares why we need to reconsider what we know, or don’t, about problem gambling and its impacts on wellbeing.

The received wisdom – if that’s the right expression for near ignorance – is that problem gambling is relatively uncommon and the damage to wellbeing is limited to the individual and perhaps their immediate family.

Around 300,000 problem gamblers in UK
What we know is that psychologists have devised a way of spotting problem gamblers by asking 10 questions and counting if they get three or more ‘wrong’.

In large and (more or less) random sample surveys it turns out that 0.7% of UK adults get classified as problem gamblers – so a tiny problem? Well 0.7% is a third of a million adults;  about the same number as the city of Sheffield has.  

So, not so small scale, but still not a worry if it’s limited in effect. But if the impact is bigger than we suspected for each individual problem gambler, it would be a really big problem for all of us.

Aggregate cost of £30bn each year for all problem gambers
What can psychologists tell us about how big a problem this is, per problem gambler. Well, it seems that nobody bothered to quantify this! The first to ask, and answer, this question is new research: How much of a problem is problem gambling.

The question is hard to answer, as are so many unanswered questions, but our estimate of the answer is that the cost aggregated across all problem gamblers is probably around £30 billion each year. Suddenly what we thought of as a small problem, is actually a huge one in economic terms.

A different approach: asking problem gamblers how they feel
So how did we go about estimating this? We adopted the methodology pioneered by Richard Layard and his colleagues in the Centre for Economic Performance at the London School of Economics. Despite economists preferring to infer how people feel from how they behave, Layard and colleagues have been busy promoting the idea that it’s worth asking people how they feel, on a numerical wellbeing scale.

The idea has gained a lot of traction in the policy arena. So much so that even hard-nosed economists, who are naturally inclined to be wellbeing sceptics, are beginning to take notice. Such wellbeing questions now find their way into many social surveys. Thanks to the Gambling Commission and David Forrest, a specialist in the economics of gambling at Liverpool University, the question was tacked onto the end of the 2010 British Gambling Prevalence Survey. This survey also asked the 10 magic problem gambling questions to about 10,000 randomly selected households, as well as asking them about their spending on gambling products.

Problem gamblers in lowest 10% for self-reported wellbeing scores
The methodology first asks what happens to self-reported wellbeing for players who get no questions ‘wrong’ for those 10 problem gambler identification questions.

The graph below shows what we found. People who give more and more incorrect answers (the so-called DSM score), correspondingly report their wellbeing to be lower and lower.

On average, those with no wrong answers said that their wellbeing was about a reasonably contented eight. About 30% score eight, and about 50% score more than eight.

But the average wellbeing for those diagnosed with a gambling problem, by the DSM score, was just over six. Less than 10% of the general population sampled were this unhappy. So this establishes how much lower is the wellbeing of problem gamblers relative to non-problem gamblers.

The relationship between wellbeing and DSM score


Problem gambling has similar social costs to alcohol misuse
Next, we ask what the relationship between wellbeing and income looks like. It turns out that problem gamblers and non-problem gamblers are different in other ways that affect wellbeing. The difference in wellbeing between problem and non-problem gambers is 1.5 on a log scale. What does this mean? Instead of explaining log scales, let me put it in money terms: a wellbeing difference of 1.5 is about equivalent to a difference of around £90k each year. A huge difference.

So this finding shows the difference in wellbeing terms between problem and non-problem gamblers is close to three times as large as the effect of doubling income.

If we take that £90k average and apply it to the 750,000 adults identified as problem gamblers, the aggregate loss in wellbeing is equivalent to around  £30 billion. This is much bigger than we expected it to be. In effect, it’s the same order of magnitude as the social costs of alcohol abuse, and it doesn’t get much bigger than that.

When we discovered this, we had many reservations about this huge number. We worried that the rather crude way in which the survey measures problem gambling would imply that our estimate was too small. We worried that the crude way in which income is measured would mean that it was too large. We examined the robustness of this number to the reservations that we had as best we could with the data. But we could not convince ourselves that it was unrealistic estimate of the costs of being a problem gambler.

The data doesn’t match what we know from the gambling industry
So, the research tells us that problem gambling is a huge problem. But it doesn’t tell us what it is that makes problem gamblers so miserable. Nor does it tell us about how to deal with it? We would like to know what problem gamblers spend on gambling, by type of gambling and how much they lose. But, guess what? People lie about their gambling spending. The data, in most cases, doesn’t match what we know about gambling spending and losses from the industry. Only in the case of National Lottery products do we get information from the survey that matches what we know from the operator.

Our survey provides self-reported data on spending. We expect that problem gamblers underestimate their play (and losses) by (probably much) more than do recreational gamblers.

But the differences in our data are already really scary – even though they are probably underestimated to a large degree. Problem gamblers report average monthly gambling spending of £300 – fifteen times greater than non-problem gamblers.  

Problem gamblers spend around 10 times as much on scratchcards as do non-problem gamblers, and around 30 times as much on casino (online and offline) games, and around 50 times more on machines found in bookmakers that electronically mimic fruit machines and casino tables: so-called FOBTs (fixed odds betting terminals) where lots of money can be lost very quickly. In contrast, problem gamblers spend only 10 times as much on scratchcards and less than twice as much on lottery draw games as do non-problem gambers.

In one or two Scandinavian countries in the world, there is automatic collection of gambling spending by individuals in real time and better research will need such data. For the moment, in the UK all we can say is that we are confident that lotto is not the crack cocaine of this industry; and scratchcards probably play only a small role in the misery.

Researchers and regulators haven’t been aware
Such is the size of the problem gambling problem, and the size of our ignorance about how this occurs, we are left wondering how we have got into this state of affairs. It seems that researchers and regulators have not been aware of the size of the problem.

This is not surprising since the resources spent on problem gambling treatment and research is just a tiny fraction of that spent on alcohol abuse and tobacco use. And right now, we don’t have great quantitative evidence on what works for problem gambling – and some treatments, like Cognitive behavior therapy, has limited geographical availability.

Profiling people who are developing a problem will probably help a little – but apart from the problem being worse in young males the defining characteristic is excessive levels of expenditure. Self-control strategies are available but can be worked around too easily.

Schools might play a role since young people are vulnerable to risky products. Most importantly, it seems like a bad idea to have the resources available for training, treatment and research to be driven by contributions from the industry –  this is not something that we adopt for smoking and drinking, it makes no sense to adopt it for gambling.

A theory of change for community wellbeing

As well as this week’s blog, check out our latest call for evidence on joint-decision making in communities.

Professor Jane South

Jane South is a member of the Centre’s community wellbeing team and professor of healthy communities working in the field of volunteering, active citizenship and community health. In this blog she shares the thinking behind the new theory of change model the team has created after carrying out research, workshops and public dialogues.

Download the PDF slides explaining the theory of change model

Personal experience tells us that the communities we’d like to  live in are positive, safe and sociable. And, of course, research shows how much community life and good social connections matter for our health and wellbeing.

As part of the Centre, our communities evidence programme is reviewing and summarising existing evidence for what works to make communities more positive places for people to live in. To help us do this, we’ve developed a ‘theory of change’. This describes the ways change can happen to improve community wellbeing.

There has been increasing interest in the UK in using a theory of change approach to help unpack how programmes work, which in turn makes it easier for evaluations to ‘test’ the pathways to outcomes. Our theory of change describes a cyclical process of six stages with the ultimate aim of improving community and individual wellbeing. It’s our first attempt and draws heavily on what we heard from people and community organisations across the country during the engagement phase at the start of the project. You can see the results of that engagement in our Voice of the User work.


How the process for change works

The starting point for change is community conditions (box one in the diagram). The places where we live, how we relate to others and whether we have a say in how our local area run all influence our wellbeing. But while some people are part of communities that help them flourish, others are not.

There are things that government, organisations and individuals can all do to improve community wellbeing. For the purposes of this theory of change we’ve called these interventions (box two), but this doesn’t mean they have to be initiatives ‘done to’ communities – they could be things that people organise themselves in their neighbourhood.

Mechanisms of Change (box three) are then created, such as improving living environments, strengthening social connections and making it easier for people to take part. Things begin to change at a local level and these improved community conditions then give us the best chances to live, work and play well (box four) . Eventually changes can lead to long-term wellbeing outcomes (box five) for communities and individuals, and the ultimate reason for making change happen.

Where this community wellbeing cycle works well, there are feedback loops and things keep improving as people are more connected and involved  in community life and feel the benefits. Potentially there could be net savings from improvements in community wellbeing, although this is not a necessary part of the change process. And obviously, improving community wellbeing requires investment over time.

How can you use the theory of change?

We hope that this theory of change provides a framework for understanding and improving community wellbeing. It will also be used to help us interpret evidence. Communities are of course diverse and what works in one community may work differently- or not at all – elsewhere.  This theory of change could be used and adapted in local projects as a planning and evaluation aid.  Key questions include: What is the relationship between wellbeing benefits for the individual and for the whole community? How do we measure more of what matters, such as changes in social relationships, safety, trust and belonging?

What happens next?

Over the course of this project, we will be reviewing the community wellbeing evidence for interventions related to housing, social relations and co-production. As we find answers about what works we will refine and update our theory of change, backing it up with the evidence.

But a lot of the evidence doesn’t exist in academic journals, it lies with people working on the ground. We welcome comments on this initial theory of change – does it fit into the way you already think about improving wellbeing in your area? Do you have ideas of how it could be used? Are there things that are missing, or don’t make sense for you? We’d love to hear from you, either in the comments below, on our forum, on Twitter, or via email at

Resource round up and Centre update

During the election period we’re not publishing any new evidence, but we’ll still have a great line up of blogs, case studies and some useful resources to make sure you get your wellbeing evidence into practice  fix.

Workplace wellbeing
If you haven’t already downloaded it and posted it up on your office noticeboard (or whatever hi-tech equivalent you’re using), here’s our handy one-page factsheet on the latest evidence for wellbeing benefits at work.

And once that’s whetted your appetite, you can dip into our briefings on learning in the workplace and designing a good quality job.

Resilience in hospices and mental health in the media
It’s Mental Health Awareness Week, and we’re sharing two case studies that link with this year’s theme of surviving and thriving. Hospice UK give us an insight into a programme to improve staff wellbeing in an emotionally demanding environment. Meanwhile, Mind’s peer education for professionals is a look an an ambitious project that successfully challenged mental health stigma by training journalists.

Share your evaluations
We’ve currently got two calls for evidence live:

We will be putting out more calls throughout the year, and you can follow us on Twitter @whatworksWB for updates when these come out.

Other resources
You can find all of our evidence, research and guidance on the following themes:

Up next
After 8 June, here’s just a taster of what you can expect:

  • new evidence reviews on dance and sport and adult learning
  • guidance for community organisations on measuring personal wellbeing
  • a one-stop set of wellbeing indicators for local authorities
  • a round up of the evidence on green space and wellbeing
  • a discussion paper on community wellbeing.





Call for evidence: visual arts, mental health and wellbeing

Deadline: 26 June 2017

How does participating in visual arts impact the subjective wellbeing of adults (18-65 year olds) who have been diagnosed with a mental health condition? We are carrying out a review of all available evidence to find out.

If you work in an organisation that runs, funds, or works in any way with visual arts for adults experiencing mental health issues, we need your evaluation reports* – whether printed, digital or visual evidence – to help us tell the whole story.

Criteria for submission and review

We will accept sources for review and possible inclusion in our systematic review using the following criteria.

  • submissions must be evaluation reports only.
  • reports submitted must have been completed in the past three years (2014-present) and include author details (individuals, groups or organisations).
  • evaluation methods may be qualitative methods, quantitative methods or mixed methods.
  • the central report objective must be the measurement of wellbeing outcomes and/or evaluation of the processes by which wellbeing outcomes are achieved in visual arts interventions or initiatives related to adults with mental health conditions.

We can only consider your evaluations if they are submitted through this call for evidence. Evidence submitted to individual researchers in the programme cannot be considered. If you have previously sent documents to the culture and sport team please re-submit through this call.

Please send your evaluations to with the subject header: visual arts evidence review.

Link to PROSPERO record

*These evaluations form part of what is known as grey literature: “literature that is not formally published in sources such as books or journal articles” (Lefebvre, Manheimer, & Glanville, 2008, p. 106). This may be produced by charities, government departments, businesses, community groups and others; and may include reports, theses or dissertations, trials, and more. To find out more about why we include work not published academically and qualitative evidence, and the rigorous standards of our evidence collection, you can read our Methods Guide.