1. The OECD Better Life Initiative Romina Boarini, Head of Monitoring Well-Being and Progress OECD Statistics Directorate London School of Economics 20 June 2013

2. Outline Context OECD Better Life Initiative What’s next

3. 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”

4. 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

5. A global agenda Source: Australian Bureau of Statistics

6. 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

7. OECD Better Life Initiative Your Better Life Index A tool for learning what matters most to people’s well-being How’s Life First attempt at an international level to present a comprehensive set of well-being indicators

8. 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)

9. 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

10. Which dimensions? Work-Life Balance Housing Income and Wealth Jobs Social Connections Environment Civic Engagement Health Life Satisfaction Personal Security Education

11. 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

12. The OECD well-being framework beyond current well-being

13. 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

14. 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

15. 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

16. 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

17. Traffic lights for OECD countries

18. No country is the champion of well-being Good performance, percentage of green lights Poor performance, percentage of red lights Source : OECD calculations

19. How’s life for the average German/British household? Source : OECD calculations

20. Socio-economic inequalities in well-being

21. Understanding people’s aspirations Your Better Life Index Your Better Life Index

22. Global participation Top 10 United States France Canada United Kingdom Germany Australia Italy Japan Spain Mexico Nearly two visits from over 180 countries

23. What matters most to people ? Source: OECD calculations Weights given by users (in %)

24. WHAT’S NEXT

25. 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

26. 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 ?

27. 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 28 From measurement to policy

29. How well-being informs the policy agenda: the “WHAT” to do 29 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 30 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. 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

32. 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

33. THANK YOU! www.oecd.org/measuringprogress www.oecdbetterlifeindex.org