If you came up with this thank you dear internet person!
To me, diving into different stories and perspectives basically broadens the way I perceive life in general.
Some recent mind-bending gems to me were all books by Hanya Yanagihara and the supreme universe Liu Cixin has built.
Good writing is very very very hard.
I'm not sure if that helped me understand other people better, but I think it may have helped me understand myself a little better. Get a little more in touch with my emotions about parts of my own life. A little catharsis.
And this is not the point, but I think that getting in touch with my own feelings more probably does lead to more empathy for me. I've definitely noticed that when I feel more compassion for myself, I often also notice an increased sense of compassion for others who I perceive similarly.
Happiness I've found easiest to achieve with that empathy. Understand those around you and know your place in the world and what is and is not possible to change. Being malleable in a group while still retaining a sense of self provides a way to travel and adapt in whatever situation you find. Only books provided me with enough experience to "know" myself and how I'd react in certain scenarios.
I don't think it matters much what you read. Whatever challenges you and gets you to see the world slightly askew.