From Wealth to Wellbeing: Lessons from the United Nations' World Happiness Report

Written by Paul Spector MD via the Huffington Post

09/19/2017

Answer the following question.

Imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life. On which step of the ladder would you say you personally feel you stand at this time?

That is the question the UN started asking thousands of people in 155 countries in 2012. Since that time, happiness has come to be regarded as a marker of social progress, an essential component of wellness and a legitimate goal of public policy. 

In 2016 the Organization for Economic Co-operation and Development (OECD) redefined the growth narrative to put people’s wellbeing at the center of governments’ efforts. The 2017 UN report emphasizes the social foundations of happiness. This represents a significant shift away from what has been called the tyranny of the GDP, as sole measure of the quality of life. 

A difference of four points in average life evaluations, on a scale that runs from 0 to 10, separates the ten happiest countries from the ten unhappiest ones. The top ten countries remain the same as 2016 despite some shifts in their ranking. The top four cluster tightly with no statistically significant differences among them. 

Three-quarters of the differences between countries are due to differences in six key variables, each addressing a different aspect of life. Two involve personal material conditions (1,2), one targets individual values (6), two focus on social capital (3,4) and one combines individual factors (wealth, skills) and social factors (democracy, civil rights, social rights) (5). 

1. Income per capita 

2. Healthy life expectancy

3. Social support (as measured by having someone to count on in times of trouble)

4. Trust (as measured by a perceived absence of corruption in government and business)

5. Perceived freedom to make life decisions

6. Generosity (as measured by recent donations)

Here are the top 10 countries for 2017:

1. Norway

2. Denmark

3. Iceland

4. Switzerland 

5. Finland

6. Netherlands

7. Canada

8. New Zealand

9. Australia

10. Sweden

Other rankings of note:

11. Israel

14. USA

15. Ireland

16. Germany

19. UK

31. France 

49. Russia

51. Japan

79. China

The 2017 report’s focus on social factors provides new insights into both assessing and promoting wellbeing. For instance, bringing social foundations up from the lowest levels to world average levels would have greater impact than the combined effects of improving both GDP per capita and healthy life expectancy from bottom to average.

In fact, the effect from an increase in the number of people having someone to count on in times of trouble is, by itself, equal to the happiness effects from a 16-fold increase in average per capita annual incomes required to shift the three poorest countries up to the world average. 

A telling chapter of the report examines factors accounting for the enormous variation in happiness and misery across individuals (measured in life satisfaction). While economic, social and physical health all played a role, diagnosed mental illness was more important than income, employment or physical illness in all surveyed Western countries. In no country was physical health more important than mental health.

Similarly, in examining childhood factors for future adult happiness, the mental health of the mother and social ambience of school were found to be most important. The chapter suggests that treating depression and anxiety disorders, the most common mental illnesses, would provide the most powerful reduction in misery. It would also be the least costly way of reducing misery. 

The final chapter is dedicated to the United States, which embodies the central paradox of the report, the weakness of income as a marker of happiness. American income per person has tripled since 1960, but measured happiness has not risen. In fact, happiness numbers have started to fall. 

How do we make sense of this?

Changes in the six variables (mentioned above) over the past decade were analyzed. Two had improved (income and healthy life expectancy) while the four social variables had all deteriorated. Americans are experiencing less social support, less personal freedom, and less generosity (decreased donations). An increasing proportion of Americans do not trust government and business institutions.

These results describe a social crisis rather than an economic one. Government policy does not reflect this reality. The current administration believes accelerating economic growth will make America great again. If making America great includes healing the deepening divisions in our society, cutting social programs will not work.

A large disenfranchised population that felt left behind was pivotal in putting the current administration in power. Ironically, it is this very population that will be most hurt by weakening the social supports that serve to compensate for a broad spectrum of inequalities. 

One economic issue not being addressed by government is a ballooning income inequality. While the UN report found that household income per head explains less than 2% of the variance of happiness in any country, relative income, had a powerful effect. 

Income inequality in the US has accelerated over the past fifty years. 

In 1965, CEOs at large U.S. companies made 20 times as much as the average worker; in 2012, they made about 273 times as much. A 2013 study indicated that CEOs of fast food companies earned 1200 times as much as the typical fast food worker.

This trend applies beyond the tiny CEO population. In 1975, the average income of households in the top fifth of income distribution was 10.3 times as large as average household income in the bottom fifth. In 2015, average top incomes were 16.3 times as large as those in the bottom fifth.

One clear message in this UN report is that a nation’s fiscal capitol does not compensate for inadequate social capitol. Wealth is not wellness.

For instance the US outspends every other nation on healthcare, more than 17% of the GDP. That is approximately twice the average of the top 10 countries in this UN survey. Yet when compared to all 35 OECD countries, the US ranks 26th in maternal mortality, 27th in life expectancy and 29th in low birth weight. 

Why?

In the US, for every $1 spent on health care, about $0.90 is spent on social services. In the OECD countries, for every $1 spent on health care, approximately $2 is spent on social services.

Countries with higher ratios of social-to-health spending have better health. The same effect can be seen when comparing states within the US. Higher ratios are associated with lower rates of asthma and obesity and lower mortality among individuals with lung cancer, heart attacks and diabetes.

We need not spend more. We must spend differently.

Another message of the report is the importance of trusting government and businesses, of feeling free to direct one’s life and of having someone to count on in times of trouble.

We are by nature social animals. Neither individuals nor nations can be well without a sense of community and shared purpose. Walls will not protect us from the consequences of diminishing opportunity for a growing number of our neighbors. The UN survey on happiness is but one way of demonstrating this.

Mahatma Ghandi said it another way. “A nation’s greatness is measured by how it treats its weakest members.”