The OECD Better Life Initiative
Romina Boarini,
Head of Monitoring Well-Being and Progress
OECD Statistics Directorate
London School of Economics
20 June 2013
Outline
• Context
• OECD Better Life Initiative
• What’s next
The demand to go “beyond GDP”
• From a statistical perspective: GDP is a key measure to monitor
macro-economic activity but it is not a good metric for people’s
well-being
• From a normative perspective: GDP/economic growth is an
important means to people’s well-being but it is not the ultimate
end
•
From a public policy perspective: disconnect between what policy
makers may seek and what people want
The response to go “beyond GDP”
• At the OECD:
–
–
–
–
Long-standing tradition of work on social indicators
World Fora on Progress
Global Project – Wikiprogress
OECD Better Life Initiative
• Beyond the OECD:
–
–
–
–
–
UNDP Human Development Reports
Stiglitz-Sen-Fitoussi Commission
EU comunication: GDP and Beyond
Eurostat sponsorship
UN Resolution calling for “holistic approach to development” to
promote sustainable happiness and well-being
– Many national initiatives for measuring well-being in all countries
of the world
A global agenda
Source: Australian Bureau of Statistics
Inspiration of the Better Life Initiative
• Latest OECD response to the need to go beyond GDP
• Opportunity of OECD 50th Anniversary: Better
Policies for Better Lives
• Shift the emphasis from measurement to actionable
well-being:
– Well-being focus in policy-making
– Connecting people with policies
OECD Better Life Initiative
How’s Life
First attempt at an international level to present
a comprehensive set of well-being indicators
Your Better Life Index
A tool for learning what matters most to
people’s well-being
Defining well-being: theoretical roots
• Well-being is about “end states”, i.e. is your life
good? (Welfarism)
• Well-being is about “freedom”, i.e. are you free to
choose the life you think is good to live? (Nonwelfarist theories, e.g. capabilities)
The Better Life Initiative Framework
• The BLI framework is close to the capabilities
approach:
– Capabilities (enabling factors)
– Functionings (end states)
• It defines well-being in terms of dimensions of life
that are both:
• Instrumental to choose a better life
• Intrinsically important
Which dimensions?
Work-Life Balance Personal
Social
Security
Connections
Income and Wealth
Civic Engagement
Jobs
Environment
Housing
Health
Education
Life Satisfaction
Why these dimensions
• Largely those of the SSF Commission Report
• Review of common practices of NSOs and other
Indicators Projects (WIKIPROGRESS)
• Consultation with the OECD Committee on Statistics
The OECD well-being framework beyond current
well-being
Four key features
The OECD well-being framework focuses on:
 People rather than the economic system
 Both averages and inequalities
 Both objective and subjective aspects
 Both today and tomorrow
Measurement approach (1)
CHOOSING INDICATORS:
 Relevance of indicators
- face-validity: outcome indicators
- easily understood, unambiguous interpretation
- amenable to policy changes
- possibility of disaggregation by population groups
 Quality of supporting data
- official and well-established sources; non-official data used as placeholders in a few cases
- comparable/standardized definitions
- maximum country-coverage
- recurrent data collection
Measurement Approach (2)
• Dashboard (and traffic lights)
• Not a synthetic index (for now) as:
– There is no individual-level information from the same
survey comparable across OECD countries
– There is no consensus on how to set weights:
- The OECD should not set weights normatively
- There is no first best method to set weights based on
people’s preferences: ongoing OECD work to test various
approaches to elicit people’s preferences
Selected results from How’s Life? 2011
• No country is a champion in well-being but some
trends emerge
• Life in 2011 better on average in the OECD than
fifteen years ago
• Inequalities in all dimensions of well-being
Employment rate
Long-term
unemployment rate
Average annual
earnings per employee
Numer of rooms per
person
Dwelling without basic
facilities
Life-expectancy at birth
Self-reported health
status
Employees working very
long hours
Time devoted to leisure
and personal care
Employment rate of
women with children of
compulsory school age
Educational attainment
Students' cognitive
skills
Social network support
Voter turn-out
Consultation on rulemaking
Air quality
Intentional homicides
Self-reported
victimisation
Life-satisfaction
Affect balance
2009
Australia
Austria
Belgium
Canada
Chile
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Israel
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Household financial net
wealth per person
Household net adjusted
disposable income per
person
Traffic lights for OECD countries
2009
2010
2010
2009
2009
2009
2009
2009
2009
2000
2008
2009
2009
2010
2007
2008
2008
2008
2010
2010
2010
No country is the champion of well-being
60%
Switzerland
20% top performers
50%
Australia
60% middle performers
Iceland
20% bottom performers
Canada Norway Sweden
Denmark
40%
New Zealand
United Kingdom
Netherlands
United States
30%
Ireland
Luxembourg
Japan
Austria
20%
Korea
Belgium
Finland
France
Germany
Mexico
Chile
Slovak Republic
Poland
Spain
Russian federation
Czech Republic
10%
Italy
Turkey
Estonia
Israel
Greece
Slovenia
Brazil
Portugal
Hungary
0%
0%
10%
20%
30%
40%
50%
Poor performance, percentage of red lights
Source : OECD calculations
60%
70%
How’s life for the average German/British household?
Source : OECD calculations
Socio-economic inequalities in well-being
Income and wealth
9.00
8.00
and
ngs
Subjective well-being
7.00
Jobs and earnings
6.00
5.00
4.00
3.00
Health status
Personal security
2.00
Health status
1.00
0.00
Education
and skills
United Kingdom_High
Income
United Kingdom_Low
Income
Environmental quality
Civic engagement and
governance
Education and skills
Social connections
Total 36_High income
Total 36_Low income
Understanding people’s aspirations
Your Better Life Index
Global participation
Top 10
United States
France
Canada
United Kingdom
Germany
Australia
Italy
Japan
Spain
Mexico
Nearly two visits from over 180 countries
What matters most to people ?
14000
12000
10000
8000
6000
4000
2000
0
women
14364
23249
men
<15
15-24 25-34 35-44 45-54 55-64
>65
Weights given by users (in %)
12%
10%
8.17%
8%
8.65%
8.93%
8.93%
9.09%
9.18%
6.84%
6%
4%
2%
0%
Source: OECD calculations
9.41%
9.89%
10.28%
10.32%
WHAT’S NEXT
2013-2014 developments of the OECD well-being agenda
• Moving forward the statistical agenda
• Update of How’s Life? (Fall 2013): focus on sustainability, gender and
well-being, and jobs quality
• Country Monographs on Well-Being
• Analytical work to understand the determinants of well-being outcomes:
towards a theory of change
• Two OECD horizontal projects will make use of these findings for policy:
- NAEC
- Inclusive Growth
• Well-Being for Development
Measuring the sustainability of well-being
• 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?
Measuring sustainability: proposed How’s Life? approach
• Dashboard of physical and monetary measures of “capital”
• Different spatial levels (local, national, regional, global)
• Flows and trans-boundary impacts
• Distribution of stocks
From measurement to policy
“Our fundamental assumptions about the functioning
of economies, our policies and structural reforms,
our systems and institutions, need to be re-oriented
towards one supreme objective: improving the wellbeing of people”
OECD Secretary-General, May 2013
28
How well-being informs the policy agenda: the
“WHAT” to do
•
A more comprehensive and balanced view of what matters to
people
•
New relevant and previously overlooked well-being areas that
deserve policy attention (e.g. social connections, jobs quality;
governance, etc.)
•
Identification of policy priorities:



Examining differences between groups in the population
International Benchmarking: cross-country comparisons on well-being performance
indicates strengths and weaknesses
Better evaluating the trade-offs between current and future well-being
29
How well-being informs the policy agenda: the
“HOW” to do
•
A better understanding of well-being drivers (including people’s
behaviour and values), that helps design more effective policies
and choose the best policy instruments
•
Helps evaluating policy impacts
•
Aiming at well-being fosters joined-up, more coherent approach
to policy-making
•
Increases legitimacy and public acceptance, of policies and
ultimately their effectiveness
30
Examples of OECD work on policy uses of well-being
• Understanding well-being policy drivers
 New Approaches to Economic Challenges: policy interactions,
trade-offs and synergies
 Inclusive Growth: pro-growth and pro-wellbeing policies with
benefits shared across social groups and over time
• Workshops on Policy Use of Subjective Well-Being measures
 Cost-Benefit Analysis based on SWB
• Going national:
 Well-Being Country Reviews (Austria, Israel, the Philippines,
Uruguay)
• Stocktaking of national initiatives
• A well-being toolkit for policy-making
31
Continued interaction with research community and civil society
A
platform
for
global
discussion
on
well-being;
Research Networks in many
regions
 5th World Forum in Mexico in 2015
THANK YOU!
www.oecd.org/measuringprogress
www.oecdbetterlifeindex.org