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Looking for a Better Life? There’s an Index to Help You Find It.

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The Organization for Economic Co-operation and Development, better known as OECD, has created what they call a Better Life Index. They have put together a great amount of data from member countries, organized it by topics, mixed and stirred the numbers and the result is a simple, 0-10 scale mark for each topic and country. Unsurprisingly, the “popular students” have come out on top: Sweden, Norway, Switzerland, Canada, the Netherlands, Denmark, Luxembourg, Australia.

Life Satisfaction Index

Life Satisfaction Index. Credit: OECD Better Life Initiative

Maslow's pyramid. Credit: wikipediaThe Better Life Index is born as a way to measure the progress of a country beyond the limitations GDP growth figures impose, especially for developed countries. Let’s face it, GDP can be booming in China but life is still way more comfortable in a cozy hut in the Swiss Alps. When you reach certain economic status and your needs are covered, GDP growth goes into the background and work-life balance, personal fulfillment and education take center stage. It is just another effect of Abraham Maslow’s widely known Hierarchy of Needs. Only when you have covered your basic physiological needs you can start worrying about the upper levels.

The most useful feature of the Better Life Index is that you can interact with it. So, independently of what Mr Maslow said, you can define the importance each of the eleven available topics have for you, overweighting the most important ones or simply avoiding others.

Perhaps you have kids and education is now far more important than income. Maybe you are retired so your only worries are now safety and health to be able to enjoy life. The possibilities and combinations are endless, but like it or not, what most of the people are now worried about is housing, and this is where the Better Life Index comes short, showing its biggest and more serious flaw. The housing topic takes into account two indicators to calculate its mark: average number of rooms per house and their access to basic facilities (plumbing, electricity and such). Seriously?? We are talking about arguably the 34 most developed and industrialized countries in the world and all you can think about to evaluate housing standards is having a faucet in the bathroom? A lot of better ideas come to mind when thinking about ways to evaluate housing in a country.

For example, average rent (or ownership) price per square meter versus income, percentage of income dedicated to housing, rent versus ownership rate; all of these options would have better shown the status of housing in the countries analyzed, but the OECD decided to leave them out. Did they do that purposely? Given that housing is the Achilles heel of some of the developed 34 countries, it seems so. Using proper housing indicators, countries such as the USA (9.3), Spain (8.3) or Ireland (8.8) would have scored much worse than they did. Maybe this would have been bad PR for them so they decided to leave it out.

The rest of the indicators are properly configured though, so trying to be as objective as possible I looked at the Maslow pyramid and decided to do my own index. I overweighted Income, jobs, safety, work-life balance, life satisfaction, health and education. I left out housing because of the reasons above. The result is the following:

 Custom Better Life Index

Custom Better Life Index. Credit: OECD Better Life Initiative

Switzerland is the clear winner here, with an average income of 27,542 USD (far above an OECD average of 22,284 USD) and a long-term unemployment rate of only 1.49 percent. These numbers just strengthen the extended feeling that the Swiss do know how to rule their country and can be proud of it. The rest of the highest-ranked countries pose little surprise, with the possible exception of Canada. For me it is not by chance that, after Switzerland, the best performers in the index are two of the only developed countries that own independent energy sources: Norway and Canada. I talked about the benefits of being able to have an independent energy agenda in this post about Canada and it seems it pays off greatly.

On the opposite side of the rank we could summarize what we see as countries where people work lots of hours just to earn little money. It is the deadly domino effect of badly managed, struggling countries. High unemployment, which leads to lower salaries and worse working conditions as offer greatly surpasses demand. This, in turn, makes the life-work balance plummet, which drowns life satisfaction and even health.

Struggling countries have a lot to learn from Switzerland, the Netherlands or Luxembourg. Countries that are not rich in natural resources, but with good management, hard work, efficiency and seriousness have managed to get to the top. Because you have to keep this in mind, as a basketball coach wisely said: “hard work beats talent when talent does not work”.

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