Effect of Income Gap: Happiness, Cost and Midlife Crisis

Abstract

Personal happiness, economic and social behavior and organizational behavior are widely concerned. New concepts and tools are defined such as ability income, expected income, expected difference, and income gap. With these new tools, this paper provides an in-depth analysis of common social and economic issues: statistics on the gap between rich and poor, midlife crisis, lifelong learning, layoff, happiness-income paradox, U-shaped curve of happiness, pension systems, seniority-wage system, and so on. The happiness does not depend on the actual income, but mainly depends on expected difference. Income gap increases the cost of the organization.