the oecd better life initiative romina boarini, head of monitoring well-being and progress oecd...
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The OECD Better Life Initiative
Romina Boarini, Head of Monitoring Well-Being and ProgressOECD Statistics Directorate
London School of Economics20 June 2013
Outline
• Context
• OECD Better Life Initiative
• What’s next
• 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 demand to go “beyond GDP”
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
Your Better Life IndexA tool for learning what matters most to people’s well-being
How’s LifeFirst attempt at an international level to present a comprehensive set of well-being indicators
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? (Non-welfarist 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
Housing
Income and Wealth
Jobs
Social Connections
Environment
Civic Engagement
Health
Life Satisfaction
Personal Security
Education
• 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
Why these dimensions
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 place-holders 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
Traffic lights for OECD countriesH
ouse
hold
net
adj
uste
d di
spos
able
inco
me
per
pers
on
Hou
seho
ld fi
nanc
ial n
et
wea
lth p
er p
erso
n
Empl
oym
ent r
ate
Long
-term
un
empl
oym
ent r
ate
Aver
age
annu
al
earn
ings
per
em
ploy
ee
Num
er o
f roo
ms
per
pers
on
Dw
ellin
g w
ithou
t bas
ic
faci
litie
s
Life
-exp
ecta
ncy
at b
irth
Self-
repo
rted
heal
th
stat
us
Empl
oyee
s w
orki
ng v
ery
long
hou
rs
Tim
e de
vote
d to
leis
ure
and
pers
onal
car
e
Empl
oym
ent r
ate
of
wom
en w
ith c
hild
ren
of
com
puls
ory
scho
ol a
ge
Educ
atio
nal a
ttain
men
t
Stud
ents
' cog
nitiv
e sk
ills
Soci
al n
etw
ork
supp
ort
Vote
r tur
n-ou
t
Con
sulta
tion
on ru
le-
mak
ing
Air q
ualit
y
Inte
ntio
nal h
omic
ides
Self-
repo
rted
vict
imis
atio
n
Life
-sat
isfa
ctio
n
Affe
ct b
alan
ce
2009 2009 2010 2010 2009 2009 2009 2009 2009 2009 2000 2008 2009 2009 2010 2007 2008 2008 2008 2010 2010 2010
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
Australia
Austria Belgium
Brazil
Canada
Chile
Czech Republic
Denmark
Estonia
Finland
FranceGermany
Greece
Hungary
Iceland
Ireland
IsraelItaly
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Russian federation
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
0%
10%
20%
30%
40%
50%
60%
0% 10% 20% 30% 40% 50% 60% 70%
20% top performers
60% middle performers
20% bottom performers
No country is the champion of well-being
Good perform
ance, percentage of green lights
Poor performance, percentage of red lights
Source : OECD calculations
How’s life for the average German/British household?
Source : OECD calculations
Socio-economic inequalities in well-being
0.00
2.00
4.00
6.00
8.00
10.00
Income and wealth
Jobs and earnings
Health status
Education and skills
Social connections
Civic engagement
and governance
Environmental quality
Personal security
Subjective well-being
United Kingdom_High Income
United Kingdom_Low Income
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00Income and wealth
Jobs and earnings
Health status
Education and skills
Social connectionsCivic engagement and governance
Environmental quality
Personal security
Subjective well-being
Total 36_High income
Total 36_Low income
Understanding people’s aspirations
Your Better Life Index
Global participation
Top 10United States
France Canada
United KingdomGermanyAustralia
ItalyJapan Spain
Mexico
Nearly two visits from over 180 countries
What matters most to people ?
Source: OECD calculations
Weights given by users (in %)
Civic Eng
agem
ent
Comm
unity
Inco
me
Jobs
Housin
g
Safet
y
Enviro
nmen
t
Wor
k Life
Bal
ance
Educa
tion
Health
Life S
atisfa
ctio
n0%
2%
4%
6%
8%
10%
12%
6.84%
8.17%8.65% 8.93% 8.93% 9.09% 9.18% 9.41%
9.89% 10.28% 10.32%
143642324
9
womenmen
<15 15-24 25-34 35-44 45-54 55-64 >650
2000400060008000
100001200014000
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
28
“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 well-being of people”
OECD Secretary-General, May 2013
From measurement to policy
29
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
30
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
31
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
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/measuringprogresswww.oecdbetterlifeindex.org