How's Life Key Findings

Editor's Notes

• #3 A dashboard with 25 Headline indicators, around 2 per dimension More than 30 secondary indicators to complement the analysis on specific topics All selected to meet the highest statistical standards, vetted by the OECD Committee of Statistics
• #5 The dahsboard of 25 headline indicators help painting a comprehensive picture of people’s lives in OECD countries. Taking all these indicators together, we can see which countries are doing better than others in these various well-being dimensions. What we find is that there is no country that performs at the top in all the dimensions as countries have different strenghts and weaknesses in well-being. However there are clear patterns of performance that emerge. In this slide we have classified countries in three groups: very good / the 20% top performers, good / the 60% middle performers or weak performance / the 20% bottom performers.
• #6 Canada is one country with very good performance in well-being, meaning that it ranks very high in most of the dimensions. They do extremely well in personal security and housing, but also in health status and income. The only weak point is work-life balance, perhaps unsurprisingly since income is so high. However even for work-life balance they are close to the OECD average, which is remarkable. Germany ranks very high in the dimensions of environmental quality and education and skill, it is among the 20% top performers in these dimensions. Germany ranks also above the OECD average in the dimensions of work-life balance, income and wealth, jobs and earnings, housing, social connections, personal security and subjective well-being, but below average in health status and civic engagement Finally an example of a country that lies at the opposite spectrum of performance, Greece. Greece does better than the OECD average in health and work-life balance but performs below the average in all the other dimensions. These data come with the caveat that they only measure outcomes for the average household in the population, therefore ignore distribution and inequalities in well-being. The picture will be definitely different if one were to look at the well-being outcomes of the poorest of the population for instance.
• #7 Levels of self-reported life satisfaction dropped significantly in countries most severely hit by the global financial crisis, with declines between 2007 and 2012 of 20% in Greece, 12% in Spain, and 10% in Italy. At the same time, levels of stress reported by people soared. In Greece, the number of people reporting having experienced stress on the previous day almost tripled between 2009 and 2011. In the United States, the percentage of American people declaring being very satisfied with their lives fell from 78% to 67% from 2007 to 2012. The decline in life satisfaction mainly comes from the poorer labour market situation: between 2007 and 2011 employment rates fell by more than 10% in Ireland, Greece and Spain. The increase in long-term unemployment was particularly large in the euro area (from 2.6% to 5.5% between 2008 and 2012) but occurred in the United States as well. Between 2007 and 2012, the employment rate decreased by more than 4 percentage points in the United States, while the long-term unemployment rate increased by almost 2 percentage points. Five years later, there are 15 million more unemployed people than before the crisis in the OECD area. And the number of people out of job for more than a year has reached 16 million.
• #8 The most obvious and well-known manifestation of the crisis is a decline of economic well-being: In the OECD area as a whole real GDP per capita declined by almost 2.5% per year, between 2007 and 2009 with slow growth resuming since 2010. By contrast, national accounts measures of household disposable income showed more resilience than GDP, with continued growth, albeit at very modest rates. In Europe we saw a very different picture as the impact of the economic crisis on real household income was more delayed than elsewhere and also, overall, more severe: real household disposable income per capita increased up to 2009 and started to decline from 2010 onwards. Between 2009 and 2012, real household disposable income per capita dropped by more than 1% per year, with the largest decline occurring in 2011, when real GDP per capita had started to pick up again. In 2012, both real GDP and household net disposable income per capita dropped again. The fall in primary income per capita mainly reflected the decline in operating surplus and in property income, as compared to a more modest fall in compensation of employees. Between 2007 and 2009, net transfers paid by households fell, while social transfers in kind increased. However, redistribution of income operated through taxes and transfers towards households sustained primary income only up to 2009; from 2010 onwards, net transfers paid by households started increasing again, while social transfers in kind stagnated as fiscal consolidation became a policy priority and economic activity recovered only timidly. The reduction of government structural primary deficit was the largest in the euro area, and was associated to a large decline in real household disposable income per capita. Beyond affecting the financial position of households, the crisis has also brought changes in housing conditions. The capacity of households to meet housing expenses was seriously hit. In Europe, the percentage of the population living in households whose total housing costs (net of housing allowance) exceeded 40% of their income increased significantly in Spain, Estonia and Ireland (from 7% to 9%) for owners who are still repaying their mortgages (second chart). The share of people reporting that total housing costs were a heavy burden (not shown) has also increased since 2007, especially in countries where household disposable income has fallen the most such as Greece, Hungary, Ireland and Spain.
• #9 In the countries most severely hit by the crisis, people have lost trust in institutions. In these countries, the percentage of people reporting to trust national government fell by 10% between 2007 and 2012. Today, in the Euro Area, less than half of the citizens trust their governments, the lowest level since 2006. In Greece the percentage of people reporting that they trust the government fell from 38% to 13% between 2007 and 2012. This % fell from 30% to 28% in Italy, from 57% to 35% in Ireland and from 60 to 44% in Belgium. Personal and informal networks strengthened during the crisis and often acted as last-resort resources. Families provided a nest for relatives who lost their houses and/or jobs, and an increasing number of people used their personal networks to find a job. On the other hand, solidarity went beyond personal networks, with higher of numbers of people volunteering some of their time and helping out strangers. In the OECD average the % of people volunteering some of their time increased from 22 to 24%. In Europe, this increase has been visible in Hungary and in Italy for instance where these figures increased both by 4% points The number of people helping strangers went from 46% to 50% between 2007 and 2012. in Europe, this increase has been particularly visible there again in Hungary and in Italy where these figures increased by 14 and 22% points respectively.
• #10 The full well-being consequences of the crisis will not be known for many years. The report provides evidence on a range of well-being dimensions where the impact of the crisis is visible. Evidence from previous crises however shows that some of the impacts are only measurable in the medium and longer-term. [In addition, there are areas where the crisis has already manifested itself but the available statistics are simply not timely enough to show it.] The report concentrates on poor outcomes today that may imply even poorer outcomes tomorrow; for instance poverty, high debt, unemployment and job insecurity are all risk factors for population health in the future; prolonged unemployment today also means lower skills and thus lower employability tomorrow. One group that has been particularly affected by the crisis and this impact may play out further in the distant future is youth. Young people have suffered the most from deteriorating labour market conditions. [The first chart shows you how employment rates of different groups of population in the OECD have evolved since the crisis started.] In the EU, the employment rate for the youth went down from 38% in 2007 to 33% in 2012. In Greece, this rate fall from 23% in 2008 to 12% in 2012. Same trend in Ireland where the employement rate for youth went down from 50% in 2008 to 28%% in 2012. These short-term effects may have longer-term consequences on future earnings later in life for instance. Evidence shows that diplaced workers typically experience a decline in wages compared to pre-displacement job. We also know that the effects of recessions on personal earnings are typically larger for youth even in countries with generous welfare systems, and that these effects persist in adulthood. The other group which was also strongly hit by the crisis is the low income and low educated people. The first chart also shows that employment of low-skilled workers dropped between 2008 and 2009 and has not fully recovered since then. A very similar picture is observed in European countries particularly hit by the crisis. In the EU, the employment rate for low-skilled workers dropped from 57% to 54% between 2008 and 2009. This figure dropped from 60% down to 53% in Spain over the same period of time for this category of workers. Beyond jobs losses, the crisis may hit future well-being of people by affecting their health and their capacity to meet basic medical expenses. The second chart shows that in the European countries hit by the crisis self-reported unmet medical needs, with the largest increases observed in Greece and Italy. The increase has been larger for the poor, confirming studies that document that low-income people postpone medical treatment financial distress. All in all, these results illustrate the need for closely monitoring health outcomes of the most vulnerable, i.e. those with lower education, or those in poverty and with high levels of debt [ and to monitor the effects of fiscal consolidation strategies on these groups of the population].
• #11 1/ Having a job is one of the major drivers of material living standards but it is also a powerful determinant of people’s quality of life. As people spend a majority of their daily life at work and work for a significant part of their life, employment can provide not just a salary but also opportunities for people to develop new skills and feel useful in the society. Recall that with the crisis, the drop in life satisfaction is mainly explained by the increase of unemployment rates and by the fact that many people lost their jobs. 2/ So the quality of job is critical. The OECD has conducted an in-depth analysis on job quality, which goes well beyond standard frameworks (that usually look at aspects such as working hours/arrangements; job security; social security systems), to describe what is a good working environment and what matters to people at work. The starting point for defining the quality of the working environment is to look at the features of work and workplace and how these affect people’s health. This approach is rooted into the litterature on occupational health. What this approaches puts forward is that high well-being at work comes from the right balance between the demands they face (those aspects of the job that require physical and psychological efforts) and the different elements they have at their disposal to meet these demands. JOB DEMANDS: - Work pressure (e.g work more than 50 hours a week) - Emotional demands (e.g. handling angry clients) - Physical health risk factors (e.g. exposure to high noise or temperature) - Workplace intimidation (e.g. verbal abuse and harassment) Three elements matter a lot for people when it deals to define a good working environment : well-defined work assignments, supportive colleagues and good management practices. 3/The chapter does not show figures on this topic for the United States as the underlying surveys are not comparable enough with European instruments. We are now exploring the possibility of writing guidelines on how to measure well-being in the workplace which should lead to a harmonisation of measurement standards on these issues.
• #12 Available data for Europe shows that working in a poor working environment can have a profound impact on physical and mental health as perceived by individuals. In the 22 European countries more than one individual in three suffers from poor working conditions (blue bars in the chart). For instance 50% of workers report low level of autonomy and poor management practice, while above 40% experience poor relationships with colleagues and high work pressure. As it can be seen from the black dot, almost 40% of those declaring any of these poor working conditions report that work is impairing their health. In a more sophisticated analysis (not shown here) we look at the effect of cumulating various “demands” or negative features from jobs (i.e. workplace intimidation, high exposure to physical health factors, high work pressure) on health as well as at the compensation effect of cumulating various “resources” or positive features from jobs (i.e. large work autonomy, good management practices, good relationships with colleagues). We observe that job resources have a powerful impact in terms of reducing the detrimental effect of jobs demands on people mental health. We also see that jobs that combine high resources and low demands are associated with the lowest incidence of sick leaves, which means that high well-being at work is critical for firms too. This finding is in line with those from other studies that show that a good working environment enhances well-being at work, as well as workers’ productivity, and this spills over to firms’ performance (in terms of lower health costs, lower staff turn-over and higher financial turnover).
• #13 Quality of employment encompasses many elements, some of which are perhaps even more fundamental/basic that well-being at work. For instance, paid work should ensure adequate standards of living, so at the very least those who work should escape from poverty. As this charts shows, this is not the case in many countries of the world). For instance, in the Euro area, in 2010, Spain, Greece, Italy were the countries with the highest levels of in-work poverty with nearly 12% Greek, Spanish or Italian people households with at least one worker experienced in-work poverty. On the other side, the levels of poverty rates are the smallest in Germany, Ireland and in Czech Republic with less than 4% of households with at least one worker experiencing in-work poverty. In the OECD as a whole, 8% of people living in households with at least one worker experienced in-work poverty. In-work poverty reflects different forms of precarious employment (e.g. low working hours and hourly pay among full-time workers, frequent moves between low-paid work and joblessness, etc) and has increased during the crisis.
• #14 The report also looks at gender differences in well-being as it is important to go beyond the average picture given by country-level data. Understanding how well-being is distributed in the population is important to better target policies and understand what progress specific groups of the population has accomplished and what remains to be done. The gender analysis carried out in How’s Life 2013 looks at how women and men fare in the 11 well-being dimensions, spanning from early childhood to later years in life, and by considering both economic and social outcomes. The picture that emerges is one where no gender systematically outperforms the other. Women score worse than men in a number of traditional economic spheres but men face new challenges and have to adapt to new roles. Let me start from the former aspect. 1/ In terms of material conditions, much progress on gender equality has been achieved over the past decade in most of the OECD countries. In terms of education, girls have caught up with boys in graduation rates at secondary and upper secondary levels. At work age, the gender gap between men and women is closing in terms of wage or employment gap but it is still in favour of men. However, in some European countries, gender wage gaps have increased in some countries (Italy, Portugal, France, Poland). In all the OECD countries, women’s wages are lower than men’s with a gap ranging from less than 10% in Mexico and New-Zealand to 30% and above in Korea and Japan. In Europe, Hungary, Norway and Belgium are the countries with the lowest gender wage gaps (below 9%) whereas these gaps reach 20% or more in Germany, Israel and Finland. So how to explain the persistent wage and employment gap? Part-time work continues to be a predominantly women-domain and is often the only way for women to balance paid work with family responsibilities. The higher share of women in temporary and part-time jobs, combined with lower or delayed career advancement due to childrearing, are major contributors to the gender pay gap. In addition, women are still under-represented in high-value jobs. For instance, on average, less than 25% of scientists and engineers are women. 2/ In terms of work-life balance, there is also an important gender gap that leaves some room for improvement. Indeed inequalities in time use between men and women are persistent. Women continue to bear the brunt of household tasks despite their increasing participation on the paid labour market. If men and women shared equally the burden of household tasks, women will gain 5 hours of free time per week (for personal care or leisure) on average across OECD countries. In Europe, there is a substantial variation in the division of chores across countries; for instance, Italian women do 11 hours more total work (paid and unpaid work) than Italian men per week. On the other side of the spectrum, the burden of households tasks is the most equally shared in the Nordic countries and in Belgium (less than 5 hours of difference) but still at the disadvantage of women.
• #15 Other areas where women are still lagging behind are safety and political participation. With respect to the former, two in three victims of homicide are men. Women, however, are the primary target of intimate partner violence and are significantly more fearful of crime than men. On average, across OECD countries, one in four women said they have been victim of intimate violence from their partner at least once in their life. The proportion of women experiencing physical and/or sexual violence in their lifetime rises is above 40% in Turkey and Mexico. Research shows that violence perpetrated to women occurs in every culture, country and age group affects people from all socioeconomic, educational and religious backgrounds. In addition, women’s representation in national politics remains low. In the OECD, on average, women occupy 27% of national parliamentary seats, up from 17% compared to 1997. Even in countries with higher gender equality (e.g. Sweden), women are under-represented in politics, occupying much less than 50% of the parliamentary seats. And when women do assume higher positions in public office, they are more likely to occupy ministries with a socio-cultural focus than those with economic and key strategic functions. However, there are areas where women do unambiguously better then men: For instance, women live longer and are increasingly more educated. Indeed men are facing new challenges and will have to adapt to new roles (e.g. they are more likely than women to work longer or for ‘atypical’ hours outside the home, and have been hit harder by the economic turndown (e.g. the share of women earning more than their partners has increased in the past few years, which, for many men, calls into question traditional views of gender roles in the family). On average, a newborn girl could expect to live 82 years on average compared with 77 years for a new born boy In terms of education, girls have overtaken boys in graduation rates at secondary and upper secondary levels. However, young women tend to go into fields of study with worse employment prospects. For example, young women are much less likely than young men to choose Science, Technology, Engineering, or Mathematics (STEM) as field of study at the tertiary level.
• #16 Some of these differences may be explained by attitudes as well as men and women do not necessarily value the same aspects: => In terms of social support, women tend to turn to friends when they are depressed and to partners for looking for a job. Men do the opposite: they turn to friends for job opportunities while relying on partners when they are depressed. On average, 19% of women (compared to 14% of men) reported getting support from their spouses when looking for a job. In Europe, the gap between partner’s and friend’s support is largest in Turkey, in Slovenia and in East-European countries such as Estonia, Poland and the Slovak Republic. => For instance, work wise, women value more flexibility of work schedule, social relations at work and significance of the tasks and they place less value on remuneration than do men. Caveat: we only have European figures for the former chart and the second image relies on research (not our numbers).
• #17  Sustainable development: meeting “the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Report, 1987) - well-being gives us a way to operationalise “needs” : WHAT do we want to sustain? Measurement focus: the potential for well-being in the future - Requires going beyond current outcomes, to look at drivers - Measuring the stock of resources passed on to future generations (“wealth accounting”/ the “capital approach”) This means we need to know: - What are the key resources that matter for well-being? - How can we monitor those resources consistently over time? Four sets of resources have been identified as important for well-being in the long-term. These are collectively called CAPITAL. Capital represents a store of value (or wealth) that can provide a stream of benefits over time. Capital takes time to accumulate, and is relatively persistent over time, although it can change suddenly. Our proposed measurement approach differentiates between economic capital, natural capital, human capital and social capital. Each of these has wide-ranging impacts on well-being outcomes. ECONOMIC CAPITAL - includes “manufactured” or “physical” capital such as roads and bridges as well as buildings and machinery. - also includes the “knowledge capital” built up through investment in R&D NATURAL CAPITAL - includes a very diverse range of “environmental assets” (water resources, minerals, energy resources, timber, soil…. etc). These are captured under the UNSC’s System of Environmental and Economic Accounting (SEEA) Central Framework. - also includes ECOSYSTEMS. These are hard to measure, but include forests, oceans, and the atmosphere. So for example indicators about the atmosphere (e.g. CO2 concentrations) would be included here. HUMAN CAPITAL - “the knowledge, skills, competencies and attributes embodied in individuals that contribute to creation of personal, social and economic well-being” - education and skills, tacit knowledge, health… - often seen in terms of “quality of labour” – i.e. contribution to economic productivity, partly reflected in wages - for well-being, the contribution of human capital is much broader SOCIAL CAPITAL - trust and cooperative norms. - institutions and governance.  Its very important at this point to say: these are not the only drivers of well-being. A whole range of things can happen in the future that can influence well-being achievements – including the choices and policies that future generations make. There might be wars or natural disasters that have a major impact on well-being. So measuring capital does not enable us to predict or guarantee the future. But a capital approach is helpful because it focuses on things we can measure today, and that which matter for future well-being. It’s not the whole story. But it’s a start. We can also MAP capital to various well-being outcomes (i.e. the flow of “benefits” from capital stocks). A key research agenda is to improve our knowledge of how different capital stocks combine to jointly ‘produce well-being’’ outcomes. Improving our knowledge will help us to build and refine an indicator set. The approach we take in How’s Life: We propose to measure the sustainability of well-being through: A dashboard of both physical and (where possible) monetary measures of capital STOCKS These may need to be at various different spatial levels. Ecosystems in particular often don’t fit neatly within national boundaries (e.g. atmosphere). Global social capital (e.g. trust and cooperation) might be particularly important for sustainability, too. To understand more about why stocks CHANGE OVER TIME, we can also look at FLOWS. These include investments, depreciation, and depletion. Sometimes it might also be important to look at emissions produced (e.g. carbon emissions). These indicators will be particularly important for policy-makers wanting to assess how the choices we make today affect the choices that will be available to future generations. Trans-boundary impacts (i.e. the impact one country has on well-being in other countries) are also important. These are typically also flows. Footprint measures can be very helpful here. Finally, in our framework for measuring current well-being, we emphasise the DISTRIBUTION of outcomes. Distribution matters for capital stocks too. We can look at this both in terms of ownership and in terms of access to resources. Efficient allocation of (and access to) resources is important if the current distribution of well-being outcomes is to be sustained in future.