Of all economic indicators, a high employment rate is most likely to correlate with greater happiness, according to researchers.
The London School of Economics (LSE) consulted 29 academics, of whom 24 agreed that employment backed by a welfare system was the biggest factor in promoting well-being.
The same number said politicians should prioritise keeping unemployment low to boost happiness levels.
The findings are a boon for Theresa May and the Tories, who have overseen falling unemployment since 2010.
The latest figures show more than 32million are in work - the most ever. More than three-quarters of the working-age population were employed and just over one in 25 adults were out of work - both levels unmatched in the past 40 years.
At the same time, well-being surveys led by the Office for National Statistics show happiness levels continuing to rise. Figures are up three percentage points since 2012 and have climbed steadily since the 2016 Brexit referendum result.
The LSE academics have urged ministers to bring in official happiness measurements to help elucidate economic statistics. They said unemployment is often linked to lower levels of well-being, as it can lead to psychological issues such as low self-esteem and loneliness.
The report said: “Unemployment is the macroeconomic phenomenon most detrimental to national well-being, and maintaining low unemployment should be a major focus of economic policy.”
One of the researchers, John Helliwell of the University of British Columbia, said inflation was another useful predictor of happiness but unemployment had twice as powerful an effect.