This report examines the emerging evidence on well-being outcomes for OECD countries in the first 15 months after COVID-19 was declared a pandemic by the World Health Organisation (i.e. March 2020 – June 2021). As part of the How’s Life? series of reports, it follows the structure of the OECD Well‑Being Framework, spanning current well-being, inclusion and sustainability. Thus, the report provides a holistic picture of how people’s lives have been affected so far, how these impacts have differed across population groups, and what is happening to the stocks of resources (natural, economic, human and social capital) that help to sustain well-being over time. In addition, the report considers how a well-being lens can inform policy development and the design of pandemic recovery strategies, as well as to achieve stronger strategic alignment across public agencies and between public, private and civil society actors.

As a starting point, this report draws on the same indicators and sources used in the How’s Life? 2020 report. This is feasible for some aspects of material well-being and economic capital in particular, as well as for data from the Gallup World Poll, used in the absence of harmonised official data sources for a limited number of indicators. However, for other outcomes, the report relies on a number of ad-hoc studies and new data collections that have emerged during the crisis. At the national level, these sources range from experimental time use studies (UK Office of National Statistics) to ‘crowdsourced’ mental health data (Statistics Canada), a Household Pulse Survey (United States Census Bureau), and the SOEP-Cov study in Germany. In other cases, existing data collections have been adapted – for example, Stats NZ introduced supplemental well-being questions in the Household Labour Force Survey in 2020, providing quarterly estimates of outcomes such as life satisfaction. At the international level, novel data collections include the Eurofound Living, Working and COVID-19 Study; the Imperial College London/YouGov COVID-19 Public Monitor; and the REpresentations, PErceptions and ATtitudes on COVID-19 (REPEAT) survey from Sciences Po. Within the OECD, existing data collections such as the Risks That Matter survey have been adapted to address COVID-19 relevant concerns.

The COVID-19 pandemic is having far-reaching consequences for how we live, work and connect with one another, as well as for the economic, human, social and environmental systems that support well-being over time. Excess deaths in OECD countries averaged 16% between March 2020 and early May 2021, leading to a 7-month fall in OECD-average life expectancy in 2020 alone. Government support helped to sustain OECD average household income levels in 2020, and stemmed the tide of unemployment, even as average hours worked fell sharply, and nearly 1 in 3 people reported at least one financial difficulty. Data from 15 OECD countries suggest that over one-quarter of people were at risk of depression or anxiety in 2020. Confinement measures brought new challenges in terms of school closures, unpaid care work, and domestic violence. Some pressures on well-being eased in the earliest stages of the pandemic (e.g. carbon emissions fell, road deaths reduced, trust in government rallied, and gender-gaps in unpaid home and care work narrowed), but all now show strong signs of reverting back to business as usual. And as the pandemic has worn on, more people are feeling worn out. In early 2021, one-third of people reported feeling too tired after work to do necessary household chores, up from 22% in 2020. Feelings of loneliness, division and disconnection from society also grew between mid-2020 and the first half of 2021.

After an initial focus on the emergency response to COVID-19, governments are now developing recovery strategies that could lay the foundations for future well-being, shaping the long-term paths for economies and societies. This chapter looks at how a well-being lens can inform policy prioritisation and the design of recovery strategies, and can help achieve stronger strategic alignment across public agencies and between public, private and civil society organisations. Building on the evidence presented in the following chapters, it identifies common well-being priorities across OECD countries in the wake of the pandemic. The chapter then describes five strategic policy channels that can help address these well-being priorities in ways that simultaneously raise current and future well-being while promoting opportunities for all. Ultimately, achieving such well-being synergies requires new ways of working within the system of government and across the public and private sectors and civil society.

COVID-19’s impact on households’ material conditions has been significant. Although government support ensured that average household income did not decrease as markedly as GDP in 2020, many households did nevertheless face financial difficulties. The pandemic led to the closure, both permanently and temporarily, of activities and businesses, and for many jobs teleworking is simply not an option. Despite unprecedented government action to support workers and employers, labour underutilisation rates nearly doubled, and there has been a steep reduction in hours worked. Overcrowded and poor-quality housing conditions increase vulnerability to COVID-19, while the lack of Internet access still prevents some people from working, studying or accessing services remotely. Housing cost overburden and sharp rises in rents and house prices have added to the difficulties faced by poorer households. These impacts have tended to hit vulnerable people and places the hardest, threatening to widen pre-existing inequalities.

As people contend with rising COVID cases and deaths, and cope with lockdowns, confinements and the economic fallout of the pandemic, their quality of life has been greatly altered. Both physical and mental health outcomes have declined. Preliminary evidence suggests that the resulting disruptions to schooling may be associated with serious long-term risks to children’s life chances. Average life satisfaction has fallen slightly in most countries, but early evidence in some cases also suggests a surprising level of resilience. Like many other outcomes, subjective measures of well-being are sensitive to the timing of data collection within 2020, reflecting evolving changes in COVID risks, lockdown measures and the overall government response. This underscores the need to strengthen rapid data collection systems in order to monitor and react to individuals’ changing circumstances in real time.

COVID-19 has profoundly affected how people spend their time, how they relate to one another and their institutions, and how safe they are and feel. Social distancing multiplied and compounded feelings of loneliness and lack of connectedness during the first year of the pandemic. Working conditions in 2020 (including telework and contact restrictions in work locations outside the home) have worn people out. In addition, household and care tasks have multiplied. While overall crime levels (bar domestic violence) and road deaths have declined up to now amidst lockdowns, new types of cybercrime have emerged, and homicide rates are up in a few countries. Voter turnout in the first year of the pandemic was, for the most part, not held back as governments adapted special voting arrangements but a large share of the population feels increasingly left out of society.

The pandemic’s consequences for jobs and incomes are weighing heavily on already vulnerable population groups. Industries that were most affected by lockdowns typically include higher shares of younger, lower-educated and lower-paid workers. Across the OECD, the employment gap between young people and other working-age adults widened, and the youth unemployment rate reached twice that of other working-age adults in Q2 2020. On average across EU countries, the labour income loss between 2019 and 2020 was four times higher for workers in the bottom income quintile, relative to workers in the top quintile. Women, mothers, immigrants and those belonging to racial/ethnic minorities and LGBTQ+ communities were more likely to lose their jobs and are now facing particular financial strain. Housing challenges were also exacerbated, with vulnerable groups struggling to access affordable and quality housing.

The impacts of COVID-19 on quality of life have not been distributed evenly across the populations of OECD countries. While men and the elderly were more likely to die from the virus, women and young people have been more likely to suffer a deterioration in mental health and life satisfaction. People on lower incomes or without employment and/or members of racial and ethnic minority groups are more likely to experience worse physical and mental health outcomes. Children from disadvantaged households are at risk of being left behind as schools shift to remote learning, widening existing gaps in knowledge and skills. Inequalities in access to green space, which helps bolster mental well-being, further disadvantage low socio-economic and racial and ethnic minority groups during lockdowns.

While the COVID-19 pandemic has affected the way almost everyone connects with each other, spends their time, relates to society and experiences safety, some groups have suffered more than others. Those with financial difficulties, the unemployed, women and people without university education felt particularly lonely in 2020, as did younger people and those living alone. Apart from the youngest age group, these characteristics were already risk factors for well-being pre-COVID, but absolute gaps widened for vulnerable groups since then. Similar patterns can be observed for feeling left out of society. Both men and women experienced an increase in the burden of unpaid domestic work and care for children (or other family members), but most of this additional burden still fell on women. Women have also been affected by increases in domestic violence.

The impact of the pandemic on economic capital, which includes both produced (man-made) and financial assets, has differed across sectors and types of assets. Total investment in OECD countries has significantly declined due to high uncertainty in the economy. In particular, private sector investment has fallen, while investment in intellectual assets (as a share of the total) has increased slightly. Both household savings and household financial net worth have increased, while the impact of the crisis on household debt has been limited. These averages, however, mask divergent trends, with both wealth and savings increasing faster among the wealthy. In one-third of the 23 OECD countries with data, corporate debt either reached or exceeded levels observed during the Global Financial Crisis. Government financial net worth declined and gross government debt increased due to unprecedented public spending on pandemic support programmes.

Human capital is vital to long-term well-being, since it addresses the future health, knowledge, competencies and skills of society. The pandemic has adversely impacted current well-being, but it has also weakened the stocks of human capital that will shape future well-being and resilience. In OECD countries, COVID-19 has led to millions of potential years of life lost and exacerbated the dangers of certain health risk factors, including obesity and smoking. As more young people drop out of school due to learning disruptions from the pandemic, long-term educational attainment could fall. Record numbers of people are finding themselves unemployed, underemployed or marginally attached to the labour market – particularly those in the youngest age cohort – which could lead to scarring effects that persist well into the future. For young adults who began their careers in the midst of the Global Financial Crisis, the pandemic is set to compound their disadvantages.

Social capital is about social norms, shared values and institutional arrangements that foster co-operation. Volunteering via official organisations, already on a downward trend, dropped in 2020, but signs of increased solidarity were also visible across the OECD, and charitable giving rose. Faster adoption of and adherence to containment measures in communities with higher interpersonal trust also led to fewer COVID-19 cases. The 2020 increase in trust in institutions in face of the common threat of COVID-19 started to wear off by early 2021. The pandemic forced governments to make difficult choices about temporarily restraining personal freedoms, to fast-track new regulations and cut back on impact assessments and active stakeholder engagement. Progress towards gender parity in politics, a proxy for the inclusiveness of institutions, continued but remains far from parity, including in COVID-19 task forces. More digital parliamentary practices have both positive and negative implications for female political participation.

Natural capital underpins human health and well-being, both directly and by supporting economic activity. Few data currently exist to assess the impacts of COVID-19 on natural capital, and this chapter therefore covers only selected aspects of biodiversity and climate. The suspension of economic and social activity during the pandemic has done little to ease the overall pressures on natural systems, which have been mounting over many decades. Biodiversity loss creates a wide variety of risks for well-being, including contributing to climate change and increasing the risk of disease transmission between humans and animals. A brief reprieve in energy-related CO2 emissions (-5.8%, globally) will have little bearing on atmospheric concentrations of greenhouse gases without concerted policy action to accelerate emissions reductions. Analysis of COVID-19 stimulus measures across OECD and partner countries indicates that the volume of environmentally negative or mixed spending will at least match that spent on environmentally positive measures.