What Makes a Country Happy?

Better Life Index, Happiness, Life Satisfaction

The Better Life Index, founded by the OECD in 1961, uses 11 topics designed to help compare countries on measures of well-being. There are 34 countries which are members of the Organisation for Economic Cooperation and Development which brings together most of the world’s developed economies and a number of emerging economies.

Data for the rankings in the Better Life Index come from topics the OECD identifies as being essential to quality of life. These include housing, income, jobs, community, education, environment, civic engagement, health, life satisfaction, safety and work-life balance.

Strong economic growth puts Australia at the top of the “Happiest Developed Nation in the World” list for the third year in a row. Other factors that make Australia a great place to live include long life expectancy and low unemployment rates. Rounding out the top ten happiest countries (in order) are Sweden, Canada, Norway, Switzerland, United States, Denmark, The Netherlands, Iceland and the United Kingdom.

Living in satisfactory housing conditions is one of the most important aspects of people’s lives. Shelter is obviously a basic human need but it takes more than four walls and a roof to make one happy. Housing should offer a place to sleep and rest where people feel safe and have privacy and personal space – making a house a “home.”

The vast majority of OECD households (87%) are satisfied with their housing. In Germany, Ireland, Spain and Belgium, more than 93% of households expressed satisfaction. However, in Korea, Turkey and the Russian Federation, the level was below 75%.

Money doesn’t buy happiness, but it is an important means to achieving higher living standards and thus greater well-being. Higher economic wealth may also improve access to quality education, healthcare and housing.

The highest ranked countries in this category were the United States, followed by Switzerland, Luxembourg, Belgium, Canada, and Japan. In Australia, this was one of their lower ranked topics, due to the huge gap between the rich and the poor in that country. The top 20% earns six times more than the bottom 20%.

Obviously, there is an economic benefit to having a job, but for most of us, daily work is more than that. It is a source of self-satisfaction, provides a connection to society, and develops skills and competencies.

Across the OECD, nearly 66% of the working-age population aged 15 to 64 has a paid job. Employment levels are highest in Iceland (79%), Switzerland (79%) and Norway (75%). They are lowest in Turkey (48%), Greece (56%), and Hungary (56%).

The frequency of our contact with others and the quality of our personal relationships are crucial determinants of our well-being. Studies show that time spent with friends is associated with a higher average level of positive feelings than time spent other ways. A strong social network can provide emotional support during good times and bad. Nearly 94% of Australians surveyed said they could rely on someone in time of need. The average across the OECD was 90%.

Helping others also makes you happy. People who volunteer tend to be more satisfied with their lives than those who do not. On average, people across OECD countries spend 4 minutes per day in volunteer activity. People in New Zealand, Ireland and the United States spend more than twice that time volunteering. The lowest rates of volunteerism occur in Hungary, Korea, Poland, Slovenia, France, Estonia, Spain and Mexico.

Education plays a key role in providing individuals with the knowledge, skills, and competencies they need to participate effectively in society and the economy. In addition, education may improve lives in such areas as health, civic participation, political interest, and happiness. Educated people may also live longer.


Finland and Korea are the highest-performing countries in the area of education. Other top-performers include Japan, Canada, and New Zealand. The lowest performing country was Mexico.

Protecting the environment should be a long-term priority for all countries. The quality of our living environment has a direct impact on health and well-being. Having access to green spaces, for example, is an essential part of quality of life. Australia, for example, has must-see nature destinations such as the Great Barrier Reef plus has plenty of beaches and top-notch air and water quality.

"The level of atmospheric PM10- tiny air pollutant particles small enough to enter and cause damage to the lungs — is 14 micrograms per cubic meter, considerably lower than the OECD average of 21 micrograms per cubic meter," the index said. "Australia also does well in terms of water quality, as 91 percent of people say they are satisfied with the quality of their water, higher than the OECD average of 84 percent."

Civic Engagement
Transparency is a demand that we place on our government systems. We want to know who is making decisions and why. We want to be confident in our political institutions that they are doing the best possible for their citizens. Across the OECD, only 56% of citizens feel that they have a high degree of confidence and trust in their political institutions. In Australia, 71% of people surveyed conveyed trust in their government. They also have high voter turnout – 93% of those registered (overall average across the countries is 72%).

Good health brings many benefits, including enhanced access to education and the job market, an increase in productivity and wealth, reduced healthcare costs, good social relations and a longer life. Australia’s life expectancy is 84 years for women and 80 years for men. In the US, average life expectance is 79 years.

Chronic diseases including cancer, cardiovascular disease, chronic respiratory conditions and diabetes are the main causes of disability and death in OECD countries. Many of these diseases are preventable, since they are linked to modifiable lifestyles. People who do not smoke, drink alcohol in moderate quantities, are physically active, eat a balanced diet and who are not overweight or obese have a much lower risk of early death.

Life Satisfaction
Although this category is much more subjective than the others, it does offer a nice complement to the data. Life satisfaction measures how people evaluate their life as a whole rather than on their current feelings. It captures a reflective assessment of which life circumstances and conditions are important for subjective well-being.

Denmark, Iceland and Japan express the most positive life satisfaction result, while those in Turkey, Estonia and Hungary show lowest levels of happiness.

Personal security is another basic human need. Crime rates impose a great impact on well-being through the feeling of vulnerability it causes. According to recent data, 4% of people in OECD countries say they have been victims of an assault within the past 12 months. The rates for citizens of Canada, Japan, Poland, the US, and the UK are lower at 2%. Chili (8%), Brazil (8%) and Mexico (13%) report some of the highest rates of crime.

Work-Life Balance
Finding a suitable balance between work and daily living is a challenge that all workers face. If families cannot achieve their desired work-life balance, it affects not only their personal satisfaction with life, but could also affect the welfare of the country. For example, parents may need to make the difficult decision to forgo an income to care for their children, thus straining the economy.

On the other side of the coin, those forced to work long hours can have unwanted physical health effects which then decreases productivity levels and jeopardizes safety records. Plus, the more people work, the less time they have to spend on pleasurable activities, causing mental health effects as well.

Are We All Moving to Australia?
We don’t have to move in order to have a better life. In many cases, making some adjustments within your own personal community can have a great effect on your well-being. Even if you do not have the money to own a big house, make yours as pleasant to live in as possible. Go back to school and finish the degree you always wanted to achieve. If you are unhappy with your work or work-life balance, work toward making a change. Volunteer. Take care of your health. Spend time with friends. VOTE! Even small steps can bring you closer to the happy life you dream of.

Reference: The Better Life Index, The Organisation for Economic Cooperation and Development