Economic growth thrives when people feel hopeful about their future, not just about the present. Hirschman and Rothschild coined the tunnel effect, explaining this phenomenon. According to them, individuals feel pleasure when others succeed because they expect their own future prospects to improve. This effect stimulates optimism, especially among lower-income or younger people. Even if their present situation remains unchanged, they find satisfaction in others’ advancement. Consequently, economic growth acquires a positive emotional dimension through hope.
The tunnel effect describes how observing others’ success can raise one’s happiness when those successes signal potential improvement. Hirschman and Rothschild originally introduced this concept in 1973. However, modern research proves its relevance anew. A 2025 study in Frontiers in Public Health confirms that the tunnel effect links income inequality to subjective well-being by fostering hope of upward mobility. It shows how inequality can spark optimism when people perceive future gains. This mechanism connects happiness to economic growth through expectations, not direct income changes.
Particularly in situations of uneven development, people in disadvantaged positions empathize with those benefiting from growth. They anticipate eventual spillover effects. When a thriving sector lifts others indirectly, hope rises. Researchers at Union College formalized this with models showing that tunnel effects can offset the pain of reduced social status among the poor during growth episodes. Similarly, a 2025 longitudinal study published in Social Indicators Research finds that even without personal wage rises, increases in average firm wages enhance workers’ job satisfaction through the tunnel effect. Thus, growth becomes contagious and emotionally uplifting across social strata.
Youth and lower-income groups benefit more from the tunnel effect than older or wealthier cohorts. They typically place more weight on future prospects over current status. Models show that these groups gain prospective utility from expected gains, even if current status suffers. In contrast, older or higher-income individuals focus more on present comfort and social comparisons, dampening the tunnel effect. Policymakers can nurture hope by highlighting opportunities and mobility, enhancing the emotional dividends of growth for targeted groups.
However, the tunnel effect can expire if expectations remain unmet. Hirschman warned that leaders may become complacent while inequality grows because the public supports growth. When progress fails to reach all, resentment surfaces quickly. Economists at the Conversable Economist blog note that tolerance for inequality declines over time if growth becomes exclusive, as shown in Remembering Hirschman’s Tunnel Effect. For example, in Thailand, public support for inequality diminished after growth failed to benefit broad populations, as explored in research on tolerance for inequality. Therefore, sustaining hope requires inclusive growth and visible upward mobility.
To harness the tunnel effect, policymakers must ensure inclusive growth and credible mobility. First, they should invest in visible sectors that create backward and forward linkages, stimulating deep economic ecosystems. Hirschman’s concept of unbalanced growth supports this strategy: targeting key sectors catalyzes broader development. Second, policies should reinforce mobility through education, training, and fair access. Third, governments and media should highlight success stories across diverse segments to reinforce shared hope.
The tunnel effect illustrates how others’ success can boost individual happiness, especially when growth promises future improvement. It creates an emotional bridge linking economic growth to optimism. Younger and lower-income individuals feel this effect more intensely. Yet, its power fades if inequality persists without mobility. Therefore, inclusive policies and narrative strategies should sustain hope for all. Ultimately, growth that feels shared, even indirectly, fosters broad psychological well-being.
