When I was a kid (in India), I lived in what we call a "portion" - a big house divided into parts and rented out to different families. We were 7 families plus the owner who lived upstairs. We were all lower middle class families - blue collar workers with some working wives.

There was very little that a family did not know about every other family in the "colony". There was a lot of give and take - from food stuffs to magazines to utensils to hardware to what-not. The kids were of varying age, but again, all of us were friends - studying together, playing together etc. Apart from the perennial end-of-month cash crunch issues, people were happy as heck to be raising their families together.

Most importantly, each family needed the support of one or more other families for some reason or the other - there would always be a situation where someone needed either a small loan or some sugar or some coffee powder etc. It would be terribly inconvenient to live isolated socially or keep away from the community. That was not even a consideration.

Today, most of our city (Chennai, in south India) lives in modern colonies - apartment complexes with 8-20 apartments in each building. I live in one of them myself. Honestly, I hardly know anyone else in the building. In passing, yes. But zero social contact beyond the hello and smile.

We are all upper middle class, and have very little "need" for each other.

I would daresay that the social co-dependence of my earlier colony was kept us in constant contact and that was what led to our communal happiness. Now, with wealth, that need has gone away, and with it the incentive for social connections, and the resultant isolation has substantially lessened the happiness quotient.

I know the OP's question was about developed nations, but I think my anecdote is relevant.

The movie "crash" dealt with the issue of social isolation from an immigration perspective, but there are parallels there too. There was an article in New Yorker about 10 years back about the revival of Marxism which spoke about how Marx pointed out that increase in individual wealth will result in an isolation which will cause social unrest. I don't know about unrest, but unhappiness, I think, yes.