Here is yet another walkthrough of some interrelated systems fundamental to Victoria 3’s economic model, specifically the Standard of Living. This system focuses on Pop life choices and what their effect is for your country.
All Pops in Victoria 3 have a Standard of Living score between 1 and 99, which represents precisely how great their life is. Pops with levels 1-4 are labeled Starving, levels 5-9 are Struggling, and so on through Impoverished, Middling, Secure, Prosperous, Affluent, Wealthy, Lavish, and at levels 60+, Opulent. Paradox don’t really expect a lot of Pops to reach levels 60+ but they've left plenty of headroom to accommodate your mad economic experiments.
Standard of Living affects two major aspects of the game: birth- and death rate, and Pop loyalty.
Birth rate is simply the percentage of children born to Pops each year, while the death rate is the percentage of Pops who die. Both values start out high and decline with increasing Standard of Living, but birth rate declines slower than the death rate, leading to a net increase in population growth with increasing Standard of Living.
This system models that increasing Standard of Living tends to lead to longer life expectancy but declining natality. Each parameter can be modified independently by a variety of effects.
Pop loyalty is altered whenever their Standard of Living increases or declines from its current value. Meaning that, wars. for example, may not be as positive for you, even if you win them, should your Pops experience any sort of decrease in their Standard of Living, which is inevitable for most of them, because that is what wars do.
Then, what you have on your hands, is a disgruntled nation that will be hard to move and secure the advantages military success has provided.