Articles / Rubric: Rating

A Happy Continent
September 2013 | Rating

The Organisation for Economic Cooperation and Development (OECD) has calculated the country where the happiest people live. Of the 36 countries participating in the research, Australia was the leader. The country-continent has been leading the Better Life Index for its third year in a row, thanks to high economic growth. The OECD’s research was based on 11 criteria that covered the major aspects of life. The first and most basic criterion for the rating was having enough jobs. In OECD countries, nearly 66% of the working population between the ages of 15 and 64 had paying jobs. The highest employment rates were found in Iceland (79%), Switzerland (79%), and Norway (75%), while the lowest rates were in Turkey (48%), Greece (56%), and Hungary (56%).

Typically, employment figures are higher among those with higher education, and in OECD countries, it is estimated that 82% of people who have at least a college education have paid jobs, compared to 56% of those with just a secondary education, and 45% of those who didn’t complete a secondary education. Accordingly, education level was another criterion for the research, since having an education greatly improves the chances of having a good job with a decent salary.

The most important factor for happiness is of course good health. Life expectancy is the most widely used indicator of a population’s health, although it only accounts for the length, and not the quality, of a person’s life. Over the past 50 years, the life expectancy of OECD countries has increased substantially. In 2010, the average life expectancy was 80 years.

As for financial well-being, the household net adjusted disposable income in OECD countries is $23,047 per year. On average, the income of the top 20% of the OECD countries is $44,625 per year and the lowest 20% live on an estimated $9,156 per year.

One of the most important aspects of human life is satisfaction with housing conditions. Most households in the OECD countries are satisfied with their housing (87%). However, when respondents were asked to assess their overall satisfaction with life on a scale of 0 to 10, residents in OECD countries answered with a score of 6.7. But different countries had different levels of satisfaction with life. In Hungary, Portugal, Turkey, and Greece, for example, overall satisfaction with life was relatively low at less than 5.5. In Spain, Norway, the Netherlands, and Switzerland, it was the opposite, with numbers exceeding 7.5. While the level of satisfaction with life among those who had only a primary education is 6.2, those with higher education rated it as 7.1.

Other important factors influencing the research results were the mood of society, people’s relationships towards one another, personal safety, the environment, and civil rights.

Australia tops the OECD’s “Happiness Rating.” Following the home of the kangaroos were Sweden, Canada, and Norway. Fifth and sixth places went to Switzerland and the U.S. Also among the top ten best places to live were Denmark, the Netherlands, Spain, and the UK.

Canada, which earned a bronze medal in the rating, beat out all the other countries studied in terms of rooms per person, with 2.6 (for the other three states at the top of the list, this figure was 2.3). Yet, whereas Australians and Americans are spending 19% of their income on housing, Canadians spend 22%, and housing in New Zealand is slightly more expensive at 26%. The average for the other countries was 20.7%.

The situation is very different in countries like Turkey and Russia. There is an average of less than one room per person in those countries, and in Turkey more than 12% of dwellings don’t have basic sanitary facilities (3.2% in Russia). Yet the Turks spend more than Russians on housing – 21% vs. 11%.

Places that have exactly one room per person include Mexico, Hungary, and Poland. The percentage of homes without facilities in these countries is 4-4.8%, while housing expenses are 18%, 20%, and 24%, respectively.

Overall, about 87% of the population in OECD countries is satisfied with their housing conditions. In Belgium, Spain, Ireland, Germany, and Finland, it’s higher than 90%. It’s interesting to note that Russians were the most dissatisfied of all, at more than 60%.

OECD experts reviewed 36 countries for this study; however, the rating will include four more countries in the near future: India, Indonesia, China, and the UAE.

Satisfied Residents of the Kangaroo Continent

Having tallied up the numbers for all the countries, the OECD concluded that the best situation today is in Australia, where 84% of Australians are satisfied with their lives. The life expectancy of Australians is 82.

The average gross adjusted disposable income per capita is US$28,884 per year, which is higher than the OECD average. However, as OECD research shows, the gap between the rich and the poor is very pronounced here.

The employment rate, at 73% of the population, also exceeds the global average. It is important that Australia’s economy is demonstrating very steady growth in contrast to many countries that are still mired in recession. Experts believe this is largely due to the strong demand for minerals like iron ore and coal.

The economic situation in Australia seems to be quite stable, despite the fact that experts forecast a decline in GDP for this year, with economic growth of 3-3.4% in 2013. For the same period, inflation will remain at 2.5%, which is enough to allow growth at their target rate in relation to GDP.

But experts fear that the Australian leadership is being held back by two factors that could become quite dangerous to the country’s economy. The government’s financial policy since 2008 was merely a build-up of external debt to support domestic industry.  As a result, the national debt today is 98% of GDP. The second important factor for the leaders
is how revenues from mining weren’t directed to pay down the national debt, but rather to support the high living standards.

Furthermore, the stability of the Australian dollar is highly problematic and the IMF is proposing to make it a reserve currency. This would increase the demand for it, which would in turn put pressure on exports. This is why experts fear that the level of “happiness” demonstrated by Australia for the third year in a row could fall in the near future, because of what appear to be, at first glance, minor changes.

Text: Valeriya Khamrayeva

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