Innovation and Happiness: Panel Data Evidence from 17 European Countries.

This study explores the relationship between technological innovation and happiness (and subjective well-being) across 17 European countries by utilising data from the European Social Survey and other sources from 2002 to 2020. The results, based on fixed effects methods and one-step difference generalised method of moments, demon- strate a positive and robust correlation between technological innovation (measured by patents) and happiness. This suggests that innovation facilitates happiness. However, this relationship turns negative beyond a certain threshold of innovativeness, suggest- ing diminishing returns or potentially even negative effects of excessive innovation on happiness. We additionally find heterogeneous relationships between innovation and happiness based on the health status and educational attainment level of countries. The findings have significant policy implications, emphasising the need for a balanced approach that does not merely aim at maximising innovation output but also includes tools to mitigate the potential drawbacks of innovation on well-being.