How's Life? 2024

Editorial

Time for change

This report marks the 6th edition of How’s Life?, the flagship publication that charts the state of well-being in OECD countries along the key dimensions that matter to people, taking account of both current outcomes and resources for the future. The 1st edition of How’s Life? was released in the immediate aftermath of the Global Financial Crisis. This latest edition comes at an equally challenging time. Our economies and societies have yet to fully recover from the successive shocks brought about by the COVID-19 pandemic and the cost-of-living crisis. Rising geopolitical tensions and enduring conflicts in different regions of the world are also of high concern, as they bring into question the capacity for multilateral action on increasingly urgent and common issues. While Russia’s war of aggression in Ukraine is heading towards its third year and the conflicts in the Middle East and in Sudan risk spreading to entire regions, threats to present and future well-being have not abated, as news of climate-related disasters repeatedly remind us, and the path to achieving the UN 2030 Agenda and Sustainable Development Goals (SDGs) grows narrower.

Crises provide opportunities for learning and for action. Governments have drawn many important lessons from the Global Financial Crisis which have helped them meet successive challenges. Policy responses to recent shocks have contributed to protect people’s lives and livelihoods more effectively than in the past. These responses have also been forward-looking and have sought to foster greater resilience in our economies and societies and rebuild them in ways that are more environmentally sustainable. Reflecting this, while the COVID-19 pandemic and cost-of-living crisis have brought significant disruption, their negative impact on well-being has been less severe than was the case during the Global Financial Crisis.

Well-being provides a comprehensive perspective that highlights the key areas for action and can help design whole-of-government approaches for addressing challenges. As this report shows, many priorities for action lie in the social and environmental spheres. Market failures and the growing complexity of today’s economies and societies mean that these issues cannot be left to resolve themselves, nor can they be resolved in isolation. For governments and for citizens, there is an urgent and shared need to rebuild economies on bases that are more inclusive and that respect planetary boundaries.  

Promoting inclusive well-being

The report shows that financial concerns and insecurity remain widespread among the population. Currently, across the OECD, one person out of every five reports experiencing financial difficulties. Compared to the pre-pandemic period, housing costs have risen – notably for low-income households – and energy poverty has also been on an upward trend. For example, in 2023 one in 11 people in European OECD countries reported that they could not afford to keep their house adequately warm.

Government interventions have been largely successful in protecting average income and employment after 2019. However, this takes place against a backdrop of enduring material inequalities in income and wealth. More needs to be done to reduce economic disparities and promote social mobility. The gradual fall in income inequality observed since 2010 has stalled after 2019. In 2022, the top 20% of the income distribution earned on average 5.6 times more income than the bottom 20%. On average across OECD countries, the wealthiest ten percent of households own half of all household wealth. At the other end of the spectrum, households in the bottom 40 percent of the wealth distribution own little to no net wealth.

Inequalities go beyond economic divides and cut across different dimensions of well-being. Across OECD countries, people who have completed tertiary-level education do better than those who have achieved up to secondary-level education on all of the well-being outcomes considered in this report. This is true for employment outcomes, but also for non-material aspects of well-being, such as social connectedness and health. For the most part, these inequalities are not only large but also persistent, and there has been no clear change in the size of well-being gaps by education for the majority of indicators since 2010.

Significant divides in well-being continue to also be observed by age and gender. While some of these gaps have narrowed over the past decade, this has not always meant better outcomes for everyone. For instance, young people – while still outperforming older age groups in areas such as loneliness, health and some areas of emotional well-being – have seen a relative larger decline compared to other age groups in these aspects of their lives. In this respect, decreasing inequalities may also signal the emergence of new risks for particular groups, in this case for youth in terms of subjective well-being and social connectedness.

A similar picture can be seen when looking at gender divides in well-being. In over half of the well-being outcomes studied, this report finds that gender gaps have narrowed and women have started to catch up with men in many labour market outcomes and in political representation, albeit still being far from parity. Nevertheless, women still face considerable challenges. On average, they remain less likely to be employed and fare worse on some aspects of non-economic well-being such as physical pain, loneliness and feelings of security. Men face specific challenges too. On average, they live shorter lives, are more likely to report very low satisfaction with personal relationships, as well as facing much higher risk of death by homicide or suicide, overdose and alcohol abuse (the so-called “deaths of despair”).

Inequalities and well-being deprivations, especially when they compound over several important domains of life, undermine the shared bonds of society and lay the ground for polarisation. They erode trust in others and in institutions, reducing solidarity and the capacity for collective action and thereby depriving economies and societies of the resources and resilience they need to overcome new shocks and successfully navigate the large transitions they face. Reinforcing democracy means building trust and renewed legitimacy for public action. For governments, this implies a strong commitment to delivering better lives for people (and with people), for the planet and for future generations. Only at that condition we can hope to ensure sufficiently broad public support and acceptability for the policy changes made necessary by the ecological transition and societal transformations that lie ahead.

Ensuring that well-being is sustainable

Governments cannot focus only on current levels of well-being, important as they are. Properly designed well-being policies must also improve outcomes in a sustainable manner. This implies action on several fronts, starting with climate and nature. Average GHG emissions per capita have been on a downward trajectory in the decade preceding the COVID-19 pandemic, a trend that gathered further pace during the first year of the pandemic. Despite this, no OECD country is expected to reach the climate targets included in the SDGs and other international agreements by 2030. Meanwhile, climate change has increasingly impacted people’s lives, with almost 15% of the population across the OECD exposed to extreme heat in 2023 up from 13% in the 2010s. Finally, efforts to preserve natural resources could be at risk of plateauing, with progress in recycling rates and in the creation of protected areas slowing down in recent years. Risks to biodiversity have also increased in the majority of OECD countries, both in the medium- and short-term.

Social capital constitutes another important source of well-being for future generations. In this respect, the recent decline in levels of trust in government observed in some OECD countries require monitoring and possibly action. Other indicators of social capital, such as trust in others and stakeholders engagement in regulatory processes have shown no progress. Social and human capital are known to be strong determinants of resilience and enablers of positive adaptation to economic and social change. From this perspective, the decline in PISA outcomes observed in nearly all OECD countries, as well as the large differences in civic participation and engagement between socio-economic groups, offer reasons for concern.

In order to promote people’s well-being in a way that respects planetary boundaries, policies will need to accompany significant changes in behaviour affecting how we live, what we consume and produce, and tackle fundamental issues such as mental health, social connectedness, pain, worries and sadness. Putting increased emphasis on relational and social well-being, as opposed to material consumption, can help strengthen economies and societies by providing individuals with the means to find a renewed sense of purpose in life and sense of belonging within their own communities, of birth or of choice. Having agency in all spheres of life and opportunities to exert that agency (in the workplace or home for instance), rethinking the use of time and how it is spent, valuing care and cooperative activities beyond their economic returns, these issues are all central to a well-being approach. Raising and addressing them can help outline and enable modes of living that are collectively sustainable.

People’s well-being in the twin transitions

Technological change is a constant and continual process. Today, digitalization and Artificial Intelligence bring new economic opportunities, but also new conditions and challenges to which societies must adapt. Furthermore, the digital transition takes place alongside the green transition, which is also profoundly transforming the structure of economies and the distribution of material and non-material well-being. While this report does not study these issues in depth, its analysis provides a comprehensive and detailed picture of the social context that will frame these transitions and supplies the indicators that will help monitor their effects on people. Understanding this context is essential to get transition policies right.

The report is mainly addressed to governments, providing them with essential information on where their countries stand in terms of population well-being, how this has changed in the last decade, and what the prospects for future well-being are. In doing so, it aims to help them design whole-of-government approaches that can address economic, social and environmental challenges more effectively.

Promoting inclusive and sustainable well-being requires action beyond government however. The levers for improving well-being outcomes are many and interrelated. As a result, policy goals cannot be achieved without coordinated action and broad and sustained engagement with a wide range of actors. For instance, community-level action is needed to foster better mental health and social connectedness, but also to build social capital. Besides their traditional economic mission, corporate actors and investors have an important role to play – and a strong responsibility – in shaping non-material well-being outcomes (for instance job quality, well-being in the workplace…) and in preserving and possibly increasing human, natural and social capital.

The challenges we face are growing, but so is our understanding and capacity to tackle them

The challenges that governments and societies face today are no less daunting and consequential than those encountered by their predecessors when the 1st edition of this report was released in 2011. However, our ability to assess these challenges has significantly progressed since then. On the statistical side, the OECD indicators that underpin the analysis in this report are more robust, more granular and offer greater timeliness and national coverage than fifteen years ago. These advancements reflect the broader work done by the international statistical community, coordinated by the United Nations, OECD and Eurostat; made possible by the intensive work of National Statistical Offices, and further encouraged by the Pact for the Future.

At the same time, many OECD governments have launched initiatives designed to monitor and advance well-being policy objectives through the use of innovative tools and programmes. Today, more than two-thirds of OECD countries have initiatives of this kind in place. In an effort to better support its Members in their efforts to systematically integrate well-being into policy, the OECD has created the Knowledge Exchange Platform on Well-being Metrics and Policy Practice (KEP) as a space for peer-learning by governments and mutual progress in implementing well-being policies. The KEP builds on the momentum created in the G7 Finance Track under the Japanese and Italian presidencies in 2023 and 2024. Its insights will be showcased, and we hope further amplified, in the context of the 7th OECD World Forum on Well-being in Rome, where this report will be launched.

Romina Boarini,

Director of the OECD Centre on Well-Being, Inclusion, Sustainability and Equal Opportunity (WISE)