Thursday, 27 October 2011

How's Life?

By Romina Boarini

How’s Life? This is the (seemingly) simple question that the OECD put at the centre of its recent work on measuring well-being, launched on October 12 during the conference marking the two years of the Stiglitz-Sen-Fitoussi’s report (see also recent Angela’s post). How’s life talks of what people value most in their lives, what they can do, what they are and what they would like to be. Those who associate the OECD with economic forecasts and free market policies may find surprising that the OECD takes the well-being business so seriously, especially in hard economic times. But since the Organisation is seeking to inspire Better Policies for Better Lives, assessing how life is going and how it can be improved is just as fundamental as looking at financial markets and public debt.

As you readers of Wikiprogress all know, the OECD has been long involved in the quest for better measures of well-being and progress. But this is the first time that the OECD puts together many comparable indicators of well-being in OECD and a few emerging countries. How’s Life analyses well-being through eleven dimensions of people’s lives (income, jobs, housing, health, work and life balance, education, social connections, civic engagement, environment, personal security and subjective well-being), presenting a large amount of evidence on these areas. It also looks at the quality of existing well-being measures and proposes a few avenues for taking the statistical and research agenda on well-being forward.

The main findings from How’s Life are:

Well-being is much more than money. This is where we started from but this is also where we arrived at the end of the journey. How’s Life shows that economic measures are not enough to capture the complexity and the beauty of life, but also the struggle that life represents for many. Income is important for well-being, but there are other aspects, for instance social ties, opportunities and freedoms, that count even more.

Understanding well-being has a lot to do with inequalities. We already knew that averages are not enough for assessing economic well-being because income inequality is large in many countries. What we did not know, and How’s Life tells us, is that there are also many inequalities in health, education, civic engagement, social ties and environment. Many of these inequalities are driven by low-income and low-education, suggesting that nurturing children from early years can greatly make their adult life better.

Well-being is both objective and subjective. There are components of well-being that are essentially objective: having a decent housing and being healthy for instance. But there are also very important subjective aspects to take into account: for instance whether people like their jobs, whether they feel insecure in the neighboourhood where they live, etc. How’s Life shows that there are sometimes gaps between objective life circumstances and how people feel about them: for instance there are 10 insecure people per every victim of crime in the population. Gaps do not indicate that some indicators are more reliable than others. They just indicate that these various indicators are capturing different aspects of personal security and that it is important for policy makers to address criminality and concerns of crime at the same time.

How’s Life finds that well-being is not only individualistic, i.e. depending on what people have and do for themselves. It is also very much about spending time with others, helping others, building a community and feeling part of a large social network that can help in case of need. For instance life satisfaction goes up significantly when volunteering or when enjoying strong social ties.

Finally, How’s Life shows that no country excels in all dimensions (and this is also why it is important to look at all facets of people’s lives rather than at one headline number). There are however countries that tend to do very well in many of the dimensions considered, for instance Australia, Canada and the Nordic countries. Why is that? Two factors seem to matter: inequalities and the key role that well-being plays in the overall political strategy of these countries. Indeed, inequalities tend to be lower in the top-performing countries, especially among the Nordics, suggesting that a more equal distribution of opportunities and outcomes is also beneficial for average well-being. Secondly, many of the well-performing countries have adopted a broad well-being framework for designing their policies (see for instance Australia Treasury’s well-being framework and Norway’s sustainable development strategy). Their strategy is paying off.

What’s next? The second edition of How’s Life is planned for May 2013. In the meantime we will update the Better Life Index, the other big pillar of the OECD Better Life Initiative. We are also running various research projects to get better measures and understanding of well-being, together with many other international organisations and researchers worldwide. You can learn more about in our web site.

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