Measuring Better Lives is more important now than ever

This second edition of How’s Life? updates the information and deepens the analysis presented in the first edition launched two years ago, as part of the OECD Better Life Initiative. While research and analysis of statistical data have always been central to achieving the OECD’s mission of helping governments design Better Policies for Better Lives, the release of How’s Life? represented an important milestone in providing new evidence on a wide range of aspects that matter most to people’s lives. It presented a new framework for measuring better lives that shifts the focus from traditional economic measures and puts people at the centre. This framework features eleven dimensions of human well-being, including people’s income and wealth, their jobs and housing conditions, their health and skills, the time they devote to their families and friends, their ties with other people in their community, how much they trust institutions and their capacity to act as informed citizens, the quality of the environment, their experiences of violence and victimisation, their feelings and life evaluations. Thus countries’ performances are no longer assessed through the lens of GDP only. Rather, the new metrics used in How’s Life? allow us to gauge whether a range of well-being outcomes in each country are moving in line with the aspirations of citizens. In the two years since the first edition was published, OECD work on well-being has had a profound influence on the way well-being is measured across the world and on the public debate on what matters to citizens.

Measuring better lives has become even more important today, as many of our economies and societies have been stricken by the global financial crisis. Understanding how the lives of people have been affected and designing the best strategies to help those who have suffered the most requires looking well beyond the impact of the crisis on economic production and financial markets. It is thus important to have as accurate as possible information on how both people’s economic and non-economic well-being have evolved during the crisis.

The global financial crisis has seriously affected economic well-being

Many workers have lost their jobs since the start of the crisis in 2007 and many households have registered stagnating or declining levels of income and wealth. Today, there are nearly 16 million more unemployed people in the OECD area than before the crisis, and the number of people out of job for more than a year has reached 16.5 million. Meanwhile, between 2007 and 2010, relative income poverty rose in most OECD countries, especially among children and young people. Rising economic insecurity and financial strain have particularly hit low-income and low-educated households.

Trust in institutions has weakened

Other aspects of people’s well-being have also evolved in a negative way during the crisis. Life satisfaction fell considerably in some of the countries most severely hit by the crisis, such as Greece, Italy, and Spain, and in these countries more people reported experiencing high levels of stress and worry. People’s confidence in institutions also dropped dramatically, indicating a lack of trust in governments’ ability to effectively address problems affecting their lives. Countries’ political capital has been severely undermined, as today only 40% of citizens in the OECD trust their national governments – the lowest level since 2006. And in countries most affected by the crisis, only between one and three citizens out of ten trust their governments, a ratio that has more than halved since the start of the crisis.

New forms of solidarity and engagement have emerged

In some countries, responses to the crisis went beyond public policy and also came from local communities, in the forms of higher interpersonal solidarity and different forms of civic participation. While people have found it more difficult to provide financial help, an increasing number report having provided other types of support to others, and having volunteered their time to help those in need in their community. Families have also been a source of support, both financial and in-kind, and have provided an important safety net, for instance to young people who had difficulty finding a job. Many people who had to leave their homes because they could no longer afford them also report having gone to live with relatives. In Europe, higher within-household solidarity also came from women as fewer of them lost their jobs than men. This resulted in an increased share of female breadwinner couples among dual-income couples.

Well-being indicators offer new insights for policy making

Well-being metrics can provide a new and wider perspective to policy-makers in the areas that matter to people. Some of these areas have long been on their radar screen, such as jobs, health or education, but the more comprehensive set of outcome indicators at the individual or household levels contained in How’s Life? and their joint distribution across population groups can offer new insights on people’s conditions. This expanded set of indicators can also open new horizons in traditional policy areas by providing a new type of information, such as how people behave and feel about their lives, as well as in a range of new domains that may until now have been beyond the radar screen of policy makers, perhaps simply because the relevant information in these areas was not available. This edition of How’s Life? explores in some detail three measurement issues in well-being that may offer new insights for policy making: gender gaps in well-being; well-being in the workplace; and the sustainability of well-being over time.

Can women and men have it all?

The question of how well-being varies across population groups and why is fundamental to design better targeted and more effective policies. While much progress on gender equality has been achieved over the past decades, in a number of countries, well-being indicators across the life cycle – from school to entry into the labour market, the start of a new family, retirement and old age – show that gender remains an important determinant of well-being inequalities in the population. But contrary to the picture usually obtained when looking at economic conditions only, the gender gap is not always just a women’s issue. For instance, women live longer than men on average in the OECD and they are often more educated. However, women report a lower health status, have worse job prospects and fewer professional networks to rely on when looking for a job. While women tend to be marginally more satisfied with their lives overall, they experience more often negative feelings, such as stress, worry or sadness than men.

Well-being in the workplace: The importance of quality jobs

For many years, the focus of policy has mainly been on providing job opportunities and ensuring that people who wanted to work could find a job. However, most people spend a large part of their lives working and what happens in the workplace is an essential determinant of overall well-being. Having a good or quality job does not just mean receiving good salaries or having dynamic careers; it also means working in an environment that is conducive to personal accomplishment and where people are committed. People’s engagement and high sense of well-being at work depend a lot on whether they have autonomy in their job, are given learning opportunities and well-defined work objectives. Respectful and supportive management practices and support from colleagues are also important. When jobs and workplaces combine these factors, people are more apt to manage work pressure and emotionally demanding jobs, and they also tend to be healthier and more productive. For instance, in Europe, 50% of persons who face poor work organisation and workplace relationships report that work impairs their health, compared with only 15% among those with favourable working conditions.

Sustaining well-being over time

Measuring the sustainability of well-being is key to ensure sure that improving well-being today will not undermine the well-being of people in the future. This is a particularly difficult task, however, as there are many things about the future that we cannot know today. But even if we cannot predict the future, we can measure some of the factors that are more or less likely to contribute to better lives in the future. This starts with monitoring the resources that generate well-being over time and are passed on to future generations. These resources can be grouped into four main types: economic, environmental, human and social. Significant efforts are still needed to develop a set of internationally comparable indicators for each type of capital, although metrics already exist for some of them (economic capital) and efforts are underway for others (environmental capital, human capital). Measuring the sustainability of well-being also requires assessing the distribution of these resources across the population and whether these resources are managed efficiently, with a particular focus on the...