GDP is not a measure of Well-being

What is it?

The “How’s Life? 2020: Measuring Well-being” report provides valuable insights into the well-being of people in 37 OECD countries and 4 partner countries. This 5th edition offers an updated set of over 80 indicators, examining various aspects of well-being outcomes, inequalities, and resources for future well-being. The values taken into account are: Housing,  Income,  Jobs, Community, Education, Environment, Civic Engagement, Health, Life Satisfaction, Safety and Work-Life Balance.

Well-being Trends and Disparities

The “How’s Life?” report emphasizes that averages can be misleading, as what holds true on average may not apply to each country. Countries that initially had weaker well-being, particularly in eastern Europe, have seen the most significant improvements. However, there is a widening gap in resources for future well-being, such as Economic, Natural, and Social Capital, across OECD countries. The report also cautions against assuming a direct correlation between GDP growth and health outcomes, inequalities, and environmental issues. Nowadays, it is important not to measure the quality of life solely based on GDP, as this approach fails to capture essential elements of well-being and societal progress.

Varied Well-being Realities Across OECD Countries

Despite some progress in well-being since 2010, some segments of the population still face insecurity, disconnection, and despair. Financial precarity remains widespread, with a substantial percentage of OECD households at risk of falling into poverty after losing just three months of income. European OECD countries, in particular, have higher rates of difficulty making ends meet.

Challenges in Future Well-being

Quality of life concerning relationships has suffered, with limited time spent with friends and family and a significant number lacking social support during times of need. While life satisfaction has improved since 2010, a notable portion of the population in OECD countries still reports very low levels of life satisfaction. The report raises concerns about depressive symptoms, with almost 1 in 15 adults experiencing them in European OECD countries. Furthermore, “deaths of despair” from suicide, alcohol abuse, and drug overdose have risen in some countries, with the OECD average toll being significantly higher than road deaths and homicides combined.

Persistent Inequalities in Well-being

Inequalities in well-being persist. Gender, age, and education continue to contribute to enduring differences, as well as variations between top and bottom performers in well-being outcomes. Despite an increase in average household incomes, income inequality has remained unchanged since 2010, with a significant disparity between the top 20% and the bottom 20%. Women in OECD countries still face gender pay gaps, despite having more social connections and working longer hours daily, including unpaid work.

Countries with Higher Average Well-being

Countries with higher average well-being levels tend to exhibit greater equality among population groups and fewer people living in deprivation. Nordic countries, the Netherlands, New Zealand, and Switzerland rank highest in well-being and exhibit lower inequalities. However, some of the most equal countries have experienced little improvement or widening inequalities over the past decade. Sweden and Denmark, known for their high quality of life, have witnessed rising income inequality, reduced social support, and increased reports of very low life satisfaction.

Safeguarding Future Well-being: Environmental and Social Challenges

Looking to the future, well-being faces threats across natural, economic, and social systems. Environmental and social challenges demand proactive action from all OECD countries to ensure the well-being of future generations. Alarming statistics show that nearly two-thirds of people in OECD countries are exposed to dangerous air pollution, and greenhouse gas emissions reductions fall short of climate policy goals. Additionally, decision-making lacks gender diversity, with women holding only one-third of parliamentary seats in OECD countries. The report stresses the importance of bold and strategic investments in these resources to achieve lasting prosperity for both people and the planet.