OECD Better Life Index: The

The Better Life Index rates the 34 OECD member nations, as well as Brazil and the Russian Federation, on 22 variables that contribute to overall well-being, including income, education, housing, health, and life satisfaction. 24/7 Wall St. reviewed the ten countries with the highest life satisfaction score.

A healthy job market is one of the most important factors contributing to higher life evaluations. Employment rates — the percentage of the working-age population that is employed — were higher in each of the ten countries with the highest life satisfaction score than the average employment rate for the countries reviewed.

Conversely, countries with relatively unhealthy job markets had lower life satisfaction scores. Unemployment rates were above 8.5% in seven of the ten least happy countries, while they were lower than 7% in all but two of the happiest countries.

Healthy labour markets not only help promote job security, but also they can contribute to workers’ mental health. Romina Boarini, head of well-being and progress measurement in the OECD’s statistics division, noted that, “unemployment and fear of job loss are detrimental to [a worker’s] mental health.”

Feeling connected to one’s community is another factor in a country’s happiness. In all but one of the happiest countries, at least 90% of respondents reported having a quality support network that they could rely on in times of need. “People are social creatures and get pleasure from spending time with others,” Boarini said.

Good personal health, too, can contribute to a person’s happiness. In New Zealand, tied for the seventh happiest country, 90% of people surveyed considered themselves in good health, the highest proportion of all countries reviewed. Additionally, in all but one of the happiest countries, more than 70% of respondents said they were in good health, all higher than the 36 country average of 68% of people in countries reviewed.

In the United States, life satisfaction rebounded after two years of falling in the rankings, largely due to the country’s improving labour market. Despite the recession erasing a majority of wealth in the country, households had an average net worth of $146,000, by far the most among countries reviewed. Boarini warned that U.S. life satisfaction may be misleading, however, as the data are based on a small sample. In previous years, lower life satisfaction in the U.S. was attributed to income inequality. “We do know the more unequally the income is distributed, the lower the life satisfaction.” In fact, the Gini coefficient, a measure of income inequality, has worsened in the U.S. in recent years. The U.S. still has one of the worst Gini coefficients in the OECD.

To determine the happiest countries in the world, 24/7 Wall St. reviewed the countries that received the highest life satisfaction scores from the OECD Better Life Index. The OECD rated countries on eleven categories: housing, income, jobs, community, education, environment, civic engagement, health, safety, work-life balance, and life satisfaction. We used the life satisfaction index for the ranking. Additionally, we examined unemployment rates for 2013 from the International Monetary Fund.

These are the happiest countries in the world.

Life satisfaction score: 7.5 (tied-the highest) Self-reported good health: 72.0% (15th highest) Pct. with quality support network: 95.0% (4th highest) Disposable income: $26,491 (15th highest) Life expectancy: 80.1 years (12th lowest)

While having a job often helps contribute to happiness by creating a stable financial environment for families and individuals, balancing work with leisure can also be critical to finding happiness. In Denmark, 73% of the workforce was employed, higher than the OECD average employment rate. Perhaps more important, though, the Danes still found time to devote more than 16 hours each day to leisure and personal care activities, which include sleeping, socialising, and watching television. This was the most time devoted to such activities among countries reviewed. As in other countries reporting high levels of happiness, as many as 95% of Danish respondents had a quality support network, the fourth highest proportion among countries measured by the OECD. Denmark residents are also well educated, having spent an average of 19.4 years in school, the third highest among countries reviewed.