European Economic and Social CouncilBrussels, 26 January 2012

Martine Durand OECD Chief Statistician and Director of Statistics

Measuring well-being and the progress of societies : the OECD’s perspective

Contents1.Background

2.OECD’s Better Life Initiative

3.The policy link

4.Involving the public

1. Background

Background • Gap between the official statistics and people’s

perceptions of their own conditions– ‘Felt’ inflation; Pouvoir d’achat; averages vs distribution

• Credibility of official statistics, and ultimately public policies and the functioning of democratic processes

• Partly, this disconnect reflects over-reliance on GDP as the measuring rod for living standards and quality of life

• OECD started to work on these issues around 2004• Discussion about limits of GDP not new but now

high- level political interest

Well-Being and the Crisis• Crisis has put focus back to economic

growth and jobs

• However, Beyond GDP agenda more relevant than ever if past mistakes are not to be repeated– What kind of growth and for whom? – More than just growth: quality of life,

democratic voice, sustainability • from the Arab Spring to Occupy Wall Street and Los

Indignados…

• Remains a high priority for the OECD5

2.

6

The OECD Better Life Initiative

Building on almost 10 years of OECD work under the Global Project

Now moving to measuring what matters most in PEOPLE’s life

OECD@50: Better policies for better lives

Scope• Well-being here and now

–Quality of Life–Material Living Conditions

• Well-being in the future–Sustainability

• Complementary: OECD work on Green Growth

Focus

• Households and people, not just GDP

• Outcomes, not inputs or outputs

• Assessing inequalities alongside averages

• Including both objective and subjective aspects of well-being

The OECD well-being framework

An evolutionary process• Now:

– Indicators under each dimension based on existing data; all indicators reviewed by National Statistical Offices

– But not all indicators satisfy all quality criteria equally well and many gaps remain How’s Life? identifies a large unfinished statistical agenda for the future

• In future:– New and improved indicators as results from OECD

work, research and other initiatives become available

– More than just environmental sustainability (economic, human and social)

Selected Highlights from How’s Life?

No country performs best in all dimensions

Average country performance by dimension

Num

ber o

f gre

en li

ghts

out

of 2

2 he

adlin

e in

dica

tors

Number of red lights out of 22 headline indicators

60%

Source : OECD calculations

Strengths and weaknesses differ among countries

Source : OECD calculations

0

2

4

6

8

10

Income and wealth

Jobs and earnings

Housing

Work and life balance

Health status

Education and skillsSocial connections

Civic engagement and governance

Environmental quality

Personal security

Subjective well-being

United States

France

Well-being is both objective and subjective

For every person assaulted there are ten who feel unsafe

0

10

20

30

40

50

60

70

80

90

self-reported victimisation

feelings of insecurity

Percentage of the population, 2010

Source : UNODC and Gallup World Poll

Environmental sustainability

Production-based and demand-based CO2 emissions,Rate of change per year, 1995-2005

Demand-based CO2 emissions grew faster than production-based emissions in the OECD area

Source : OECD, Towards Green Growth: Monitoring Progress – OECD Indicators

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

OECD Other major economies

Production Demand

Inequality…a cross-cutting issue in How’s Life?

A few examples

Inequalities in well-being : income

Large income inequalities in many OECD countries…

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Gini coefficient, 2010

Inequalities in well-being: income

Point changes in Gini coefficient, from mid-1990s to late-2000s

… which have increased in a number of them

-10

-8

-6

-4

-2

0

2

4

6

Inequalities in well-being: health

Low-income people report lower health status

0

10

20

30

40

50

60

70

80

90

100

Highest income quintile

Lowest income quintile

Inequalities in well-being: social connections

… weaker social ties… … and lower trust in others

Percentage of people reporting that they have someone to count on in times of need, 2010

Percentage of people reporting trusting others, 2010

0

5

10

15

20

25

30

35

40

Primary Secondary Tertiary 1 2 3 4 5Axis TitleEducation Incomequintile

65

70

75

80

85

90

95

Primary Secondary Tertiary 1 2 3 4 5Axis Title

Education Incomequintile

Lower-educated and lower-income people also have…

Inequalities in well-being: jobs

Long-term unemployment much higher among youth

Long-term unemployment rate, 2010

3. The policy link

The policy link • Major challenge: outcome perspective

makes it more difficult to identify most effective policies– need multi-dimensional, integrated approach that

takes into account interdependencies and trade-offs -> difficult and ambitious endeavour

• Some country experience emerging– Well-being policy frameworks in Australian Treasury;

New-Zealand Treasury– United Kingdom: Measuring National Well-Being

follow-up; Green book on valuing social impacts…

• Key role of elected assemblies and civil society

4. Involving the public

Involving the public

• Engaging with civil society has been one of the goals of the OECD-hosted Global Project

• How’s Life? is accompanied by interactive web tool (Your Better Life Index) aimed at involving the public

Your Better Life Index

What matters most to people ?

What’s next?

• Extending the well-being agenda to developing countries as part of the new OECD Development Strategy

• Actively promoting effective use of new measures for policy-making: developing well-being policy frameworks at regional, national and international level

• Continued engagement with civil society – 4th OECD World Forum in India in October 2012

Thank you

http://www.oecdbetterlifeinitiative.org/

http://www.oecdbetterlifeindex.org/

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