The London School of Economics, London, United Kingdom
Richard Layard directs the Programme on Wellbeing at the Londons School of Economics. He is a labor economist who worked for most of his life on how to reduce unemployment and inequality. He is also one of the first economists to work on happiness, and his main current interest is how better mental health could improve our social and economic life.
He has always believed, like the 18th Century Enlightenment, that societies should be judged by the happiness of the people. And since the 1970s he has urged fellow economists to return to the 18th and 19th century idea that public policy should maximize a social welfare function depending on the distribution of happiness. In 1980 he wrote, according to Richard Easterlin, “the first paper to focus specifically on the policy implications of empirical research on happiness”. In 2005 he published Happiness: Lessons from a New Science. A second edition was published in April this year, with a new part in which he responds to the critics and clarifies his argument. He continues to find significant effects of relative income on happiness and to emphasize the importance of non-income variables on aggregate happiness.
On unemployment, Layard and colleagues developed in the 1980s the Layard-Nickell model of how the level of unemployment is determined. This has become the most commonly used model by European economists and governments. It assigns an important role to how unemployed people are treated, and provides the intellectual basis for the welfare-to-work policies introduced in many countries.