Chickens benefit from a happy and healthy environment. In general, the more space you have available the better. More space will make chickens happy, decreasing stress and increasing life span and egg production.
Chickens will enjoy all the space you can give them
Lack of space can lead to enclosures becoming dirty with excrement, and chickens may develop bald spots due to being cramped, rubbing up against the other chickens. Lack of space also means that disease can easily spread between chickens much faster.