How's Life? 2024

Executive summary

Positive trends in incomes and employment outcomes but warning signs in housing costs and self-reported financial well-being

The COVID-19 pandemic and cost-of-living crisis have significantly disrupted economies and people’s lives. Thanks to far-reaching government interventions to address the economic impacts of these compounding crises, and in particular to buffer financial shocks to households and business, incomes and employment outcomes have proven resilient: average disposable household incomes were sustained in real terms and by 2022 had not fallen significantly below pre-COVID levels in any OECD country, and after dropping in the first six months of 2020, OECD average employment rates were at historical highs by the first quarter of 2024.

At the same time, after several years of economic insecurity, cost-of-living pressures remain significant for many households, especially the most vulnerable. Since 2019, the share of low-income households overburdened by housing costs has increased in a third of OECD countries, and by 2023, one in 11 people in European OECD countries said they could not afford to keep their house adequately warm, up from one in 14 in 2019. In the decade prior to the pandemic, the average share of people saying they have difficulty making ends meet had fallen substantially across OECD countries, from 30% to 19%. This progress has now slowed dramatically, and almost 1 in 5 people still said they had financial difficulties in 2023.

Limited resilience or worsening of critical non-economic aspects of well-being since 2019

People’s quality of life, most notably their health, has also been adversely impacted by the crises of the past four years. Excess deaths during COVID-19 led to average life expectancy across OECD countries falling by almost half a year. At the same time, sustained reductions in OECD average fatalities from suicide, acute alcohol abuse and drug overdose (so-called “deaths of despair”) in the years prior to 2019 have come to an abrupt halt since then.

There have also been negative trends in how people feel about their lives and about the quality of their relationships since the pandemic. In 2023, almost 30% of people experienced a lot of physical pain, with significant increases in two-fifths of OECD countries relative to pre-pandemic levels. Similarly, over the past four years feelings of worry and sadness worsened in many OECD economies, and trends in life satisfaction were mixed. In 2023, the share of people feeling lonely ranged from 4 to 14% across OECD countries.

Inequalities in well-being remain striking, though some gaps have narrowed

Focusing solely on average outcomes can mask inequalities in people’s circumstances and experiences, and indeed, wide gaps in well-being exist between population groups. While men in OECD countries fare better than women in the majority of labour market outcomes, they are more likely to become a victim of homicide or to die from a suicide or drug overdose. Younger people tend to do relatively better when it comes to health, subjective well-being and social connectedness, whereas middle-aged adults are more likely to be employed and feel safer, and older people trust their government more. Those with tertiary education are systematically doing better than lower-educated peers. This is the case not only for employment outcomes, for which dividends to education are well established, but also for non-material aspects of well-being: compared to the population average, people with tertiary education are 1.5 times less likely to be lonely, and 1.3 times less likely to experience physical pain.

Over the past decade, the majority of age and gender gaps in well-being have narrowed. In some cases, this is because outcomes improved and comparatively more disadvantaged groups caught up: for example, since 2010, the share of women feeling safe walking alone at night increased at a higher rate than men’s, and improvements in the long-term unemployment rate for young people doubled those of older age groups. Yet in other cases, gaps narrowed because outcomes worsened, especially for those (previously) faring better: age gaps in subjective well-being and social connectedness narrowed because younger people experienced the largest relative declines in these aspects of their lives. Narrowing gender gaps in feelings of worry, pain and loneliness were due to these outcomes worsening in particular for men.

Prioritising sustainability across natural, economic and social systems is key

Much stronger action is needed to maintain today’s well-being for future generations. While many OECD governments have accelerated action on climate change, reductions in greenhouse gas emissions are insufficient to keep global warming at bay. On average, one in seven people across OECD countries were exposed to extreme heat in 2023, and water stress is classified as “medium-high” in half of the OECD countries with available data. Progress in recycling rates and the creation of protected areas has slowed since 2019. Meanwhile, the Red List Index of threatened species indicates that biodiversity risks have increased in the majority of OECD countries in both the medium- and short-term.

Economic and social capital also show signs of strain. For example, inequalities in the financial net worth of government between countries have widened since 2019, and in 2023, on average 48% of people across the OECD said they trust their national government – a higher share than pre-pandemic levels, but a decline from its peak in the early years of the COVID-19 crisis.

A focus on well-being can help navigate an increasingly complex world

As the findings of this report demonstrate, relying on single metrics to assess crisis recovery and monitor the economic system – or indeed the outcomes of policy choices – yields an incomplete picture. Considering a range of economic, social and environmental outcomes can help direct government action to where it is most needed. This means continuing the mitigation of income and employment shocks, while also taking seriously the impacts of the cost-of-living crisis evident in housing costs and self-reported measures of financial insecurity, addressing the non-material aspects of people’s lives that show clear signs of deterioration, and prioritising sustainability concerns. It also means developing the tools and processes to systematically reflect well-being evidence in policy decisions, including strategic goal-setting, assessing trade-offs and synergies in policy appraisal and impact evaluation, and informing resource allocation. Taking a more multidimensional, people-focused and forward-looking approach will be especially important in addressing major societal shifts, from population ageing, to the deep structural transformation of digitalisation and AI, and the already very real threat of climate change. Each of these have complex, interactive effects across a wide range of outcomes for people, making integrated evidence on economic, social and environmental impacts, and well-coordinated policy responses, essential.