The Happiest Countries in the World

May 5, 2014 by 247alex

Switzerland’s residents are the most satisfied with their lives for the second consecutive year, according to the Better Life Index released today. The study, published annually by the Organization for Economic Co-operation and Development (OECD), reported that United States failed to crack the top 10 for the fourth consecutive year, while neighbors Mexico and Canada did.

The Better Life Index rates the 34 OECD member nations, as well as Brazil and the Russian Federation, on 11 variables that contribute to a high quality of life, including income, education, housing, health, and life satisfaction. 24/7 Wall St. reviewed the 11 countries with the highest life satisfaction score.

Click here to see the happiest countries in the world

One of the most important factors contributing to higher life evaluations is the presence of healthy job market. Of the 11 nations with the highest levels of life satisfaction, nine were among the top 10 nations by employment rate, measured as the percentage of the working-age population that is employed.

By contrast, nations with low life satisfaction scores typically had high unemployment rates. In Greece, the nation with the lowest life satisfaction score, 27.3% of the workforce was unemployed in 2013, the highest rate in the OECD. Similarly, low-scoring Poland, Hungary and Portugal all had high unemployment rates.

According to Romina Boarini, head of monitoring well-being and progress, at the OECD, jobs provide financial security, but they also impact a person’s mental well-being. “When people lose jobs they don’t just lose a salary, they really lose out on their ability to be connected to society.”

Good health also contributes to life satisfaction. In eight of the 11 countries, a higher-than-average proportion of residents described their health as at least “good.” In Canada, 88% of respondents rated their health as “good” or better, well above the OECD-wide 69%. Life expectancies were also quite high in many of these nations. In Switzerland, the top-rated nation for life satisfaction, the average life expectancy was 82.8 years, the highest of any country reviewed by the OECD.

Boarini noted that low life satisfaction can also negatively effect health, telling 24/7 Wall St. that “There’s also a lot of evidence that when people are not very satisfied with their lives it has a negative impact on their health.”

Another factor that may contribute to residents’ life satisfaction scores in many of these nations is government spending, which includes transfer payments to citizens and purchases of goods and services. The governments of eight of the 11 top nations with the highest life satisfaction scores outspent the U.S., as a percentage of GDP, in 2013. Similarly, most spent more than the OECD average of 41.7% of GDP.

In the U.S., life satisfaction continued to drop, from 14th in last year’s report to 17th in this year’s report. This is despite the fact the U.S. led all nations in both disposable income and household net wealth per capita. One reason, Boarini highlighted, was that inequality remained pervasive in the United States. “We do know the more unequally the income is distributed the lower the life satisfaction.” In fact, according to OECD statistics, the U.S. has a higher Gini coefficient — which measures the degree of income inequality in a country after accounting for taxes and transfer payments — than all but a few member nations.

Given how well the country scores in these measures, it is clear that life satisfaction cannot be explained just by considering job opportunities and health. For example, Mexico had extremely low scores in safety, environment, jobs, and health, but still was one of the top-rated nations for life satisfaction. Boarini highlighted this disparity as well, explaining that, despite the nation’s problems “when you actually contrast that to what people are reporting they actually perform very well.” She also noted that income inequality had declined, which could explain why life satisfaction has improved. “The country has become a little more egalitarian.”

Based on figures published by the OECD as part of its annual Better Life Index, 24/7 Wall St. reviewed the 30 variables measured for each of the member nations and participating countries. The variables, in turn, make up 11 categories that together constitute the Better Life Index: housing, income, jobs, community, education, the environment, civic engagement, health, life satisfaction, safety and work-life balance. Figures used to calculate the Better Life Index and its components are from different years, and the values for individual nations represent the most current data available. Government outlays are from the November 2013 release of the OECD’s Economic Outlook. Unemployment rates and life expectancy at birth which measures income inequality after taxes and transfer payments, for each country, were also based on data from the OECD.

These are the happiest countries in the world.

11. Sweden
> Life satisfaction score: 7.4 (tied for 7th)
> Self-reported good health: 80% (8th highest)
> Employees working long hours: 1.1% (3rd lowest)
> Disposable income: $27,546 (11th highest)
> Life expectancy: 81.9 years (8th highest)

Like most of the happiest countries, employment among Swedish 15-64 year olds was particularly high, at 74% in 2012, compared with a 65% employment rate for all OECD nations. Sweden also received top marks for its environment — it has a lower level of air pollution than all but one other country. Also, 97% of Swedes were satisfied with the quality of their water last year, the highest rate across all OECD countries. Residents were also deeply engaged in the political process. The country had among the highest voting rates in the OECD, with 85% of eligible residents voting in 2010. Additionally, several studies found Sweden to have a very low levels of corruption.

10. Netherlands
> Life satisfaction score: 7.4 (tied for 7th)
> Self-reported good health: 76% (11th highest)
> Employees working long hours: 0.6% (2nd lowest)
> Disposable income: $25,697 (14th highest)
> Life expectancy: 81.3 years (11th highest)

In the Netherlands, 75% of working-age residents had jobs, among the highest percentages of all OECD countries. The Dutch, however, also enjoyed a great deal of personal time, devoting 15.44 hours per day to leisure and personal care — fifth highest among countries measured by the OECD. Not surprisingly, the Netherlands ranked as one of the best countries for work-life balance among all nations reviewed. Just 0.6% of employees in the country worked long hours — less than in any nation reviewed except for the Russian Federation. Work-life balance, combined with strong earnings, may have contributed to residents’ life satisfaction.. The $45,362 in average personal earnings among Dutch people was significantly higher than the $41,010 average personal earnings of across the OECD.

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9. Mexico
> Life satisfaction score: 7.4 (tied for 7th)
> Self-reported good health: 66% (14th lowest)
> Employees working long hours: 28.8% (2nd highest)
> Disposable income: $12,850 (2nd lowest)
> Life expectancy: 74.4 years (3rd lowest)

Mexico’s economy grew 3.4% last year, more than all but two other countries reviewed and above the OECD’s GDP growth rate of 1.2%. Still, Mexico is not without problems. The country’s air pollution is considerably worse than most other OECD nations. Mexico City is working hard to improve pollution after the U.N. named it the most polluted city on Earth two decades ago. Crime rates in Mexico are also notably higher than most other nations. Nearly 13% of residents 15 and older were assaulted last year, more than in any other country. Also, Mexico’s homicide rate was 23.4 per 100,000 people in 2010, considerably higher than the rate across the OECD of slightly more than four homicides per 100,000 people and second only to Brazil among nations reviewed. Mexicans also had poor work-life balance, with 28.8% of residents working very long hours.

8. Finland
> Life satisfaction score: 7.4 (tied for 7th)
> Self-reported good health: 69% (tied-17th lowest)
> Employees working long hours: 3.7% (9th lowest)
> Disposable income: $26,904 (12th highest)
> Life expectancy: 80.6 years (15th lowest)

Finland’s renowned education system likely contributes to the country’s well-being. Finnish students are among the world’s top performers on the PISA — the Programme for International Student Assessment — with an average score of 529, better than all but two other OECD nations. Many educators and policymakers admire the country for providing an unconventional yet high quality and well-rounded education for the vast majority of its citizens. While children do not start school until the age of seven, a Finnish resident spends an average of 19.5 years in school, more than residents in any other country measured by the OECD. When it comes to health, more than three quarters of the country’s residents said they were at least in “good” health. This was one of the best rates among countries reviewed and above the 69% for all other countries reviewed by the OECD.

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7. Australia
> Life satisfaction score: 7.4 (tied for 7th)
> Self-reported good health: 85% (4th highest)
> Employees working long hours: 14.2% (7th highest)
> Disposable income: $31,197 (4th highest)
> Life expectancy: 82.0 years (7th highest)

More than 14% of Australians said they worked very long hours, more than all but a few other nations. Residents were rewarded for their hard work, however. Per capita disposable income was $31,197 — fourth highest after the U.S., Luxembourg, and Norway. Additionally, the average personal earnings in Australia was $46,585, among the highest of all nations reviewed. Residents were also heavily engaged in politics last year. Australia’s 93% voter turnout, likely the result of compulsory voting, was the highest in the OECD. Possibly also contributing to residents’ happiness was the size of their homes. Australians live in especially large homes, averaging 2.3 rooms per person, among the most of any country reviewed.

6. Iceland
> Life satisfaction score: 7.5 (tied for 5th)
> Self-reported good health: 78% (9th highest)
> Employees working long hours: 13.7% (8th highest)
> Disposable income: $22,415 (17th lowest)
> Life expectancy: 82.4 years (4th highest)

Iceland’s employment rate of 80% among working-age residents led all countries. Icelanders also had the strongest support network out of all countries reviewed, with 96% of residents indicating they had people they could count on in an emergency. Still, in other areas measured by the Better Life Index, Icelanders didn’t fare as well. For one, the country’s educational track-record was mixed. Residents spent an average of 19.5 years on their education, the second most out of any nation. Despite that, the average PISA score among students, as well as the educational attainment of working-age citizens, ranked among the bottom half of countries reviewed. Iceland was also in the bottom half of countries in terms of work-life balance.

5. Austria
> Life satisfaction score: 7.5 (tied for 5th)
> Self-reported good health: 69% (tied-17th lowest)
> Employees working long hours: 8.6% (15th highest)
> Disposable income: $29,256 (9th highest)
> Life expectancy: 81.1 years (13th highest)

Austrians were among the most likely people of any nation to be employed. While across the OECD 65% of the working-age population was employed, in Austria, 73% of the population was. Additionally, residents were far more likely to feel they had job security, as the nation’s long-term unemployment rate was just 1.1%, far below the OECD’s rate of 2.7%. Residents were also quite happy with the quality of their community, with 95% stating they had a support network they could rely on in an emergency. Austria’s environmental quality was also quite high, potentially contributing to people’s’ happiness. Residents rated both air and water quality among the highest of any nation reviewed. High levels of government spending may have also enabled the country to provide public services, such as a social safety net and health care, that could drive up quality of life. Austria’s government spending totalled nearly 52% of GDP, among the most of any nation reviewed.

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4. Denmark
> Life satisfaction score: 7.6 (tied for 3rd)
> Self-reported good health: 71% (17th highest)
> Employees working long hours: 2.1% (4th lowest)
> Disposable income: $25,172 (15th highest)
> Life expectancy: 79.9 years (12th lowest)

Like other Scandinavian countries, Denmark’s government plays a large role in the lives of its citizens — the country has high tax rates and a comprehensive welfare system. The government’s total spending was equal to nearly 58% of GDP in 2013, second only to Finland. Excellent work-life balance likely contributed to Danes’ life satisfaction. Danes devoted an average of 16 hours a day to leisure activities and personal care, more than any other nation reviewed. Country-residents are also well-educated, having spent an average of 19.2 years in school, third-highest among countries reviewed. When asked if they could count on someone in times of need, 96% of Danish residents responded affirmatively, compared with less than 90% across the OECD.

3. Canada
> Life satisfaction score: 7.6 (tied for 3rd)
> Self-reported good health: 88% (3rd highest)
> Employees working long hours: 4.0% (11th lowest)
> Disposable income: $30,212 (7th highest)
> Life expectancy: 81.0 years (17th highest)

Canada’s per capita disposable income exceeded $30,000, and the net financial wealth of its residents exceeded $63,000, both among the highest figures of any nation measured by the OECD. However, high income and wealth alone do not explain residents’ happiness. In fact, the U.S. outperformed Canada in both measures, yet ranked just 17th in life satisfaction. Notably, while just 90% of Americans said they had someone they could rely on in an emergency — a measure used by the OECD to gauge the quality of communities — in Canada 94% said they had such a person, among the most of any nation. Canadians were also more likely to be working, and less likely to be unemployed, than their counterparties in the U.S., which also may contribute to residents’ higher evaluations of their lives.

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2. Norway
> Life satisfaction score: 7.7
> Self-reported good health: 73% (15th highest)
> Employees working long hours: 3.1% (6th lowest)
> Disposable income: $32,093 (3rd highest)
> Life expectancy: 81.4 years (10th highest)

Norway’s unemployment rate was just 3.5% last year, less than half the OECD’s unemployment rate of 7.9%. Many workers were also paid quite well. Full-time Norwegian workers earned $46,618 annually on average in 2012, among the highest personal earnings among countries reviewed. Much of the country’s wealth comes from energy sectors. Norway’s economy relies heavily on its oil industry, and it is one of the largest oil producers in Europe. Like nearly all countries with residents who rate their lives well, Norway’s environmental quality is good. As many as 96% of respondents said they were satisfied with the quality of their water, nearly the most among nations measured by the OECD.

1. Switzerland
> Life satisfaction score: 7.8
> Self-reported good health: 81% (7th highest)
> Employees working long hours: 7.3% (17th highest)
> Disposable income: $30,745 (5th highest)
> Life expectancy: 82.8 years (the highest)

For the second consecutive year, Switzerland ranked higher than any other country in the life satisfaction score. Few countries rated higher than the small Alpine nation in measures of wealth. Per capita, Swiss residents had $30,745 in household disposable income and net financial wealth exceeding $100,000 per capita. Jobs were also relatively abundant, with 79% of the working-age population employed, the second highest percentage of any country reviewed by the OECD. Residents were also more likely to feel secure in their jobs than people in any other nation considered. In addition to being wealthy and secure in their employment, residents were extraordinarily healthy. The life expectancy for Swiss residents was 82.8 years, the highest of any country measured by the OECD. Additionally, 81% of residents felt they were in good health, well-above the 69% of people across the OECD.