The Easterlin paradox in ASEAN: Welfare and economic growth

A country's ultimate goal is to achieve prosperity. Welfare serves as a benchmark for evaluating a country's progress. This article aims to analyze the economic welfare of ASEAN (Assotiation of Southeast Asian Nations) countries by examining key indicators, such as happiness, gross domestic product (GDP) per capita, unemployment, dependency ratio, and human development index (HDI). Although welfare has been objectively measured using the GDP, in recent research, happiness is rather used as a subjective indicator of well-being. This study analyzes components affecting 9 ASEAN countries' welfare from 2006 to 2023 using the System Generalized Method of Moments (SYS-GMM). The data were obtained from the World Happiness Report, World Bank, and the United Nations Development Program. The results show that GDP per capita and the dependency ratio have a strong and positive effect on the happiness index. The Easterlin Paradox theory of happiness is relevant in ASEAN, since GDP per capita positively affects happiness. Nevertheless, the happiness index is unaffected by the HDI and unemployment. To achieve inclusive prosperity, ASEAN governments must strengthen and expand regional collaboration in ASEAN's major industries and in technology, health, and education.