What makes people happy? The question, which has been debated by philosophers for centuries, now is being tackled by international bureaucrats and the results are interesting, to say the least.
24/7 Wall St. analyzed the new OECD Better Life Index to objectively determine the happiest countries in the world. The Index is based on 11 measurements of quality of life including housing, income, jobs, community, education, the environment, health, work-life balance, and life satisfaction. We made “life satisfaction” the cornerstone of our index because it is as good a proxy for “happiness” as the survey provides. We then compared “life satisfaction” scores to the other measurements to find those economic and socio-political realities that had the highest and lowest correlation to happiness.
The happiest people in the developed world get loads of social services without having to work too hard. Having abundant natural resources, a thriving services sector and a fairly homogeneous population helps as well. The OECD study no doubt would have had different results had it included politically unstable countries in the Middle East or large emerging economies where political unrest threatens to bubble over such as China.
24/7 Wall St. also looked at one critical factor that the OECD study overlooked — economic stability. Our measure of this was total national debt as a percent of GDP. The figure helps determine a country’s ability to maintain present tax levels and social services. Odds are that countries with high debt-to-GDP ratios are more likely to need austerity policies to reign-in their government spending. Otherwise, their debt costs will soar.
Nations with long-term economic strength can also afford to support employment, education, and make health care widely available. Happiness viewed in this way means that people are more likely to feel better about themselves in Norway, which has almost no debt and great social services, than in Greece, which must slash entitlement spending or risk defaulting on its debt.
Old, stable nations of northern Europe took five of the top 10 spots on our list. These include Finland, Sweden, the Netherlands, Norway, and Denmark. Switzerland is also on the list and has many characteristics in common with the Scandinavian countries. The resource-rich, English-speaking countries of Australia and Canada made the cut as well. Noticeably absent from the list are any OECD nations in Latin America, southern and eastern Europe and Asia. Many of the southern European nations like Greece, Portugal, and Spain are in economic trouble and have high unemployment. The employment and education opportunities are not as good in Mexico as in Canada, nor is the access to high-quality health care. Japan and South Korea each have stable societies, but the people in both countries tend to work long hours and have limited leisure time.
The happiest countries seem to be places where there is a good balance of work and leisure time. Not all nations can afford to keep unemployment low through government subsidies. Not all countries can afford to provide universal medical coverage. Not all countries can afford to educate almost all of their children, which in turn supports extremely high literacy rates and builds a population of skilled workers.
The ten nations on this list are rich in natural resources or highly developed service sectors. These are assets which are in short supply worldwide, and that bolsters the foundations of the economies in these countries. Money alone doesn’t buy happiness, but it sure helps.
This is the 24/7 Wall St list of the Ten Countries With The Happiest People, most of which have bought and paid for prosperity because their economies have allowed them to do so.