How a close look at the American Dream turned a top happiness expert into a specialist in despair: ‘It’s harder to be poor in a very rich country’

Graham is a senior fellow in economic studies at the Brookings Institution, a professor at the University of Maryland’s School of Public Policy, and a senior scientist at Gallup, whose World Poll supplied the data for her latest paper. She started in development economics, as a visiting fellow at the World Bank and a special adviser at both the International Monetary Fund and the Inter-American Development Bank.

Her early books were about poverty and market reform in Latin America, but she has wrestled increasingly with more existential questions of how societies make their inhabitants feel. You can see the shift in her book titles: Happiness Around the World: The Paradox of Happy Peasants and Miserable Millionaires (2009), Happiness for All? Unequal Hopes and Lives in Pursuit of the American Dream (2017), and The Power of Hope: How Wellbeing Science Can Save Us from Despair (2023).

Graham has spent years moving between the two subjects. “I’ve done a lot of hope and despair, or maybe despair and hope,” she said. “I go between them so I don’t go crazy.”

She has served on a United Nations expert group on measures of progress beyond GDP and on a National Academy of Sciences panel on well-being metrics. As Fortune reached her, she was preparing to fly to Geneva to deliver a lecture titled “Hope, Despair, and Life Outcomes.” The Geneva Graduate Institute invited her “because they said, you know, the young people, the graduate students were worried about despair.”

Her latest paper, written with Douglas Harris, Anjana Nair and Isabel Shaheen O’Malley and summarized by Brookings on Oct. 1, applies that question to the United States. The authors used Gallup data from 44 middle- and high-income countries between 2006 and 2024. In the U.S. over that period, trust in government fell 31 percentage points, trust in the courts fell 24, and the share of Americans who feel free to choose how to live fell 19. The authors found that the U.S. converts income growth into well-being less efficiently than the average country, and they call it the most extreme case of what they term “the paradox of unhappy growth.”

Graham’s explanation starts in Latin America. “I was born in Peru and I worked initially on development economics,” she said. “And I can tell you what real poverty is.” That experience still shapes how she reads the American numbers.

“Poor people in Latin America are much more hopeful than poor people in the U.S.,” Graham said. “And I’ve concluded that it’s harder to be poor in a very rich country where you’re sort of stigmatized. And plus the American Dream narrative sort of stigmatizes you.”

Happy peasants, miserable millionaires

Graham first spotted the pattern in China. In research with Shaojie Zhou and Junyi Zhang, published in World Development in 2017, she found that life satisfaction dropped “precipitously” during the early stages of the country’s rapid growth. The researchers called it a “paradox of progress.”

“They were the fastest-growing country in the world and suicides were skyrocketing,” she said, recalling with amazement how life satisfaction dropped on a par with the Great Recession or the COVID pandemic. “It disrupted everything,” Graham said. “It changed lifestyles. It created inequalities they’d never had.” The suicide rate fell back down, she added, once the most dramatic part of China’s transition to markets was over.

The American version has played out more slowly. The U.S. has outgrown nearly every other wealthy country for two decades, Graham said, but inequality has kept “gradually creeping” up “to the point that it’s corrosive.” The Brookings paper calls the U.S. the most polarized democracy in the developed world. By 2024, only 12% of Democrats and 52% of Republicans were satisfied with the country’s system of government.

‘Nobody ever talks about bad luck‘

Happiness for All? traced how unevenly hope is spread across America. Graham said she found the idea of the American Dream turns falling behind into a personal failing.

“So if you fall behind and you’re poor, it’s your fault because you didn’t work hard to get ahead,” she said. “Nobody ever talks about bad luck.”

She pointed to the founding myth of American self-making, the Horatio Alger stories of poor boys who rise on pluck and hard work. In Ragged Dick, Alger’s best-known novel, a New York shoeshine boy gets his break when he saves a rich man’s son from drowning and is rewarded with a job in the man’s office. “Even the old famous Horatio Alger story, he had a benefactor,” Graham said, “and they never talk about that when they tell the story.”

The Brookings paper makes the same argument in academic terms. The authors blame the U.S. happiness decline partly on “a deeply rooted culture of individualism and distrust of social support.” The U.S. has a “thinner social contract” than its peers, they write, “something the unequal distribution of hope in the U.S. also reflects.”

That distribution matters. In a study published this year with Redzo Mujcic of Warwick Business School, Graham followed 25,000 Australian adults for 14 years. Those with high levels of hope had better later outcomes in health, education and employment. They were also less shaken by negative life events, and they recovered faster and more completely.

“We’ve done a lot of hope, work on hope,” Graham said, explaining that hope is different from happiness and optimism. There’s an element of agency and what she called an “internal locus of control.” People with higher levels of hopefulness did better on a range of outcomes, she found, including how they adapted more quickly to negative shocks. “They were able to kind of cope better to adversity.” They were also able to measure out how much it changed over time. “It turns out it’s incredibly consistent. And so I think life satisfaction has a bit of that.”

The men the data misses

Graham’s research on despair keeps returning to people the standard statistics barely capture. Prime-age men who have left the labor force, she said, are “not counted in the data, not in the usual data we use. And they’re in very bad shape.”

In a 2021 paper with Sergio Pinto, Graham found that American men outside the labor force were “very unhappy and very pessimistic” and “disproportionately represented among opioid users.” Many of them, she said, “still live in their parents’ basements or in the parents’ census tract. So they’ve sort of failed to launch.” Without a college degree, she added, the odds of finding a good job are low, which also keeps these men from moving to where the jobs are.

This is where she parts with many of her colleagues in academia. “The macroeconomists go on and on and on about how strong the labor market is,” Graham said, while for many Americans, “their lives are so far from what the numbers are telling.” She links the rise of populism, at home and abroad, to that gap: “People are frustrated with the system and it’s failing a lot of people.”

The Americans she worries about are mostly not destitute. The system is “leaving large sectors of society behind,” she said, “maybe not totally out of work or totally penniless.” It’s leaving them without hope, she thinks.

The case against despair

Not everyone reads the data that way. Philipp Carlsson-Szlezak, global chief economist at Boston Consulting Group, has argued that the American mood is worse than American reality. In a September report, “The Kids Are Alright,” he and his co-authors found that since 2020, wage growth for the bottom quartile has outpaced the top in nearly every year, and that wealth gains have been roughly proportional across income groups. “Nothing is ever monocausal, but the biggest challenge is that of distorted expectations, in my view,” he told Fortune in September.

Retired University of Chicago economist Sam Peltzman also complicates the picture. In the General Social Survey, he found that the 2020 crash in American happiness hit hardest among the most educated and the wealthy. Graham cautions that the GSS asks people to choose among only three answers, so “you lose a lot of the variance.” Gallup’s life-satisfaction question uses a 0-to-10 scale.

On Gallup’s scale, the Brookings data shows an America pulling apart. The share of Americans who rate their lives 7 to 10 out of 10 barely moved, while the average fell more steeply. Many Americans, the authors write, “continue to be quite satisfied,” while “others are increasingly unhappy.”

“Our narrative and our numbers,” Graham said, “are really out of touch with how people are living right now.”