This is a very special year for the OECD, as we are celebrating our 50th Anniversary. Reaching 50 is an important moment in everyone’s life: you take stock of what you have achieved, you think of where you want to go next. Thinking about the future is all the more important as we are still in the aftermath of the most devastating crisis that the global economy has experienced since World War II. The hesitant recovery, high joblessness, unprecedented volatility of financial markets, and public debts that have reached levels never experienced before, make us think twice when defining the necessary policy responses in the long-run.
This report is published under the responsibility of the Secretary General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries.
Everyone aspires to a good life. But what does a "good" (or better) life mean? In recent years, concerns have emerged that standard macro-economic statistics, such as GDP, which for a long time had been used as proxies to measure well-being, failed to give a true account of people’s current and future living conditions. The ongoing financial and economic crisis has reinforced this perception and it is now widely recognised that data on GDP provide only a partial perspective on the broad range of factors that matter to people’s lives. Even during times of economic hardship, when restoring growth matters for the achievement of many well-being outcomes, such as having a good job or access to affordable housing, at the core of policy action must be the needs, concerns and aspirations of people and the sustainability of our societies.
Income and Wealth
Income and wealth are essential components of individual well-being. Income allows people to satisfy their needs and pursue many other goals that they deem important to their lives, while wealth makes it possible to sustain these choices over time. Both income and wealth enhance individuals’ freedom to choose the lives that they want to live, though there are some aspects of their lives that cannot be bought by money. This chapter presents a set of indicators that aims to provide a coherent, but non-exhaustive, picture of the economic conditions of people and households. The indicators measure the principal components that shape material conditions, their dynamics and how they are distributed within each country. This chapter finds that income and wealth have been substantially enhanced during the last fifteen years. However, this rise did not lift all boats: income inequality has been rising in many countries, and some groups have been left behind. This suggests that growth-oriented policies need to be designed to take into account distributional considerations.
Jobs and Earnings
Having a job that matches one’s aspirations and competencies and that pays adequate earnings is a universal aspiration of people around the globe. In general, the economic growth of the past fifteen years has gone in hand with an increase in employment and earnings in most OECD and other major economies, but these accomplishments are being put to a serious test by the ongoing economic crisis. Further, earnings inequalities have increased in most OECD countries, some aspects of working conditions (e.g. involuntary part-time) have worsened, and having a job seems to provide less of a shield against the risk of poverty than in the past. Women, youth and older workers face relatively high job insecurity and weaker ties with the labour market. Even though employment statistics generally meet high statistical standards, there is scope for improvement in several domains, as in the case of data on hours worked, earnings disparities and measurement of the quality of employment. While many international organisations have been active in defining a measurement framework for assessing job quality, information gaps in this field are still very large, especially as far as official statistics are concerned.
Housing is a major element of people’s material living standards. It is essential to meet basic needs, such as for shelter from weather conditions, and to offer a sense of personal security, privacy and personal space. Good housing conditions are also essential for people’s health and affect childhood development. Further, housing costs make up a large share of the household budget and constitute the main component of household wealth. This chapter describes housing conditions through indicators of the living space available, access to basic sanitary facilities, the weight of housing costs on household income and people’s satisfaction with their housing. No core set of housing indicators currently exists, which underscores the need for more comparable data in this field. Overall, housing conditions seem good in most OECD countries although, in terms of living space, the results are less satisfactory when household composition is taken into consideration. On average, almost all household dwellings in OECD countries have access to basic sanitary facilities, although important differences remain across countries, and a non-negligible share of people in OECD countries live in overcrowded dwellings. Housing costs are a major concern for households’ finances, and income is an essential driver of housing conditions.
Being healthy is one of the most valued aspects of people’s lives, and one that affects the probability of having a job, earning an adequate income, and actively participating in a range of valued social activities. People’s health status is, however, difficult to measure, as it encompasses a variety of dimensions, such as the length of people’s lives, the presence and severity of chronic conditions, and the many aspects of physical morbidity and mental health. This chapter describes people’s health status through some well-established indicators of mortality and morbidity. In most OECD countries, people can expect to live long lives and report good or very good health. However, a large proportion of the population report chronic health conditions, and the number of those who are limited in some way in their daily activities is also significant. Inequalities in health status are also pervasive, with women and older people reporting lower satisfaction with their health status, and with large health disparities across income groups. Comparative information on people’s health status remains limited in important ways, and the same applies to our understanding of the interplay of the various factors that determine health outcomes.
Work and life balance
The ability to combine work, family commitments and personal life is important for the wellbeing of all household members. It is also important for society as a whole, as it ensures that people have sufficient time to socialise and participate in the life of the community. This chapter presents a selection of indicators that describe the distribution of people’s time between paid work, time with family, commuting, leisure and personal care. The balance of work and non-work activities has changed considerably in recent decades, with overall gains in leisure and reductions in hours worked. However, these trends conceal the increased complexity of people’s lives, with both men and women taking on a wider variety of tasks in the workplace and at home. The distribution of tasks within the family is still influenced by gender roles: men are more likely to work longer hours of paid work, while women spend longer hours in unpaid domestic work. While gender imbalances are shaped by culture, policy makers can help to address the issue by encouraging supportive and flexible working practices, thereby making it easier for parents to strike a better balance between work and home life.
Education and skills
Education and skills have a strong influence on people’s well-being. Education opens opportunities for people and brings a wide range of benefits to society, including higher economic growth, stronger social cohesion and less crime. By investing in education, families and governments can reach many economic and social goals at the same time. This chapter considers a few wellestablished educational indicators that provide a basic picture of both the current educational status of the adult population and selected skills of youth, skills needed to undertake the broad range of activities essential to life in modern society. This chapter finds that education has increased substantially over the past few decades, with countries converging towards a similar level of educational attainment. However, strong disparities remain in the quality of educational outcomes, as measured by the reading and civic skills of students. Despite the free availability of school services in many countries, educational attainment and students’ skills are strongly influenced by the incomes and socio-economic backgrounds of their families, with educational disadvantage cumulating over the life course. This suggests that educational inequalities should be tackled as early as possible in life.
Beyond the intrinsic pleasure that people derive from spending time with others, social connections have positive spill-over effects for individual and societal well-being. People with extensive and supportive networks have better health, tend to live longer, and are more likely to be employed. At a society-wide level, social connections can generate shared values – such as trust in others and norms of reciprocity – which influence a range of outcomes, including economic growth, democratic participation and crime. The indicators used in this chapter to measure different aspects of social connections refer to social network support and to the frequency of social contact. Overall, personal social networks are relatively strong in OECD countries, with most people seeing friends and/or relatives on a regular basis and reporting that they have someone to count on in times of need. However, there are significant differences between different socio-economic and demographic groups, with the old, the poor and the less-educated having weaker social support networks. There are also wide crosscountry differences in levels of interpersonal trust – one key indicator of the outcomes of social connections. Measuring social connections remains challenging, however, and more work is needed to develop comparable measures in this field.
Civic engagement and governance
Civic engagement allows people to express their voice and to contribute to the political functioning of their society. In turn, in well-functioning democracies, civic engagement shapes the institutions that govern people’s lives. While civic engagement and governance are essential for democracies, they are also very difficult to measure. This chapter presents some limited evidence, and emphasises the need for a better conceptual foundation for these concepts and for their measurement. The indicators included provide information about the possibility for citizens to express their voices in political processes, on some aspects of the quality of governance, and on people’s satisfaction with public institutions. Even if these indicators are far from ideal, this chapter identifies some important patterns. First, while levels of voter turnout vary across countries, most OECD countries experienced declining participation rates over the last few decades. Second, the shift towards greater transparency and consultation in rule-making has not translated into higher civic engagement. Third, even if all OECD citizens enjoy fundamental civic rights, they do not necessarily exercise them effectively, particularly in the case of the poor, the less educated and the youth. Overall, these patterns are important as they point to shortcomings in democratic institutions, and to a gap between how citizens and elites perceive the functioning of democratic systems.
People’s lives are strongly affected by the healthiness of their physical environment. The impact of pollutants, hazardous substances and noise on people’s health is sizeable. Environmental quality also matters intrinsically, as most people value the beauty and healthiness of the place where they live, and care about the degradation of the planet and the depletion of its natural resources. Preserving environmental and natural resources is also one of the most important challenges for ensuring the sustainability of well-being over time. This chapter shows that in OECD countries the concentrations of particulate matters in the air have dropped in the last twenty years, although in many countries they remain above target levels. People in other major economies, in addition to being exposed to high pollutant concentrations, often lack access to basic environmental services such as safe drinking water and sanitation. For the world as a whole, around one-fourth of the total burden of disease, or 13 million premature deaths, could be prevented every year through environmental improvements. Environmental policies have a critical role to play in dealing with global health priorities and in improving people’s lives.
Personal security is a key component of people’s well-being. Although many factors influence personal security, crime is one of the most common ones. Crime may lead to the loss of life and property, physical pain, post-traumatic stress and anxiety, both in the short and in the long run. Living in safe communities is essential to people’s well-being, as feelings of insecurity will limit people’s daily activities and functionings. The indicators considered in this chapter provide a general picture of the nature and extent of crime, and of its effects on people’s wellbeing. This chapter shows that intentional homicide rates are low in most OECD countries, although there is significant variation across countries. Self-reported victimisation rates for assaults and muggings are below 5% in most OECD countries, but higher in other major economies. Similarly, most people living in OECD countries declare that they feel safe when walking alone in their neighbourhood at night, while this proportion is much lower in some of the other major economies. Evidence on other threats to personal security, such as domestic violence, remains scattered and suffers from cultural biases and methodological limitations that hamper international comparability.
Subjective well-being reflects the notion that how people experience a set of circumstances is as important as the circumstances themselves, and that people are the best judges of how their own lives are going. This chapter uses two measures of subjective well-being: an average measure of how people evaluate their lives as a whole, and a measure of the share of the population experiencing more positive than negative emotions. The chapter finds that, for most OECD countries, levels of subjective well-being are high, regardless of the measure used. However, there is much variation across countries, and some OECD countries have levels of subjective well-being that are lower than those experienced by some middleincome or developing nations. Although only limited information is available on changes over time, average life satisfaction appears to have increased over the past thirty years in some countries and stagnated in others. As the limited evidence on subjective well-being that is currently available is based on small scale unofficial surveys, the chapter draws attention to the importance of building on ongoing initiatives to establish more robust and comparable measures and to forge a better understanding of its drivers.
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