European Economic and Social Council Brussels, 26 January 2012 Martine Durand OECD Chief Statistician and Director of Statistics Measuring well-being and the progress of societies : the OECDs perspective

Contents 1. Background 2. OECDs Better Life Initiative 3. The policy link 4. Involving the public

1. Background

Background Gap between the official statistics and peoples perceptions of their own conditions – Felt inflation; Pouvoir dachat; 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 OECD 5

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 PEOPLEs life Better policies for better lives OECD Better Life Initiative Hows Life? (report) Your Better Life Index (interactive web tool)

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 Hows 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 Hows Life?

No country performs best in all dimensions Average country performance by dimension Number of green lights out of 22 headline indicators Number of red lights out of 22 headline indicators 60% Source : OECD calculations

Strengths and weaknesses differ among countries Source : OECD calculations

Well-being is both objective and subjective For every person assaulted there are ten who feel unsafe 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, Demand-based CO2 emissions grew faster than production- based emissions in the OECD area Source : OECD, Towards Green Growth: Monitoring Progress – OECD Indicators OECDOther major economies ProductionDemand

Inequality…a cross-cutting issue in Hows Life? A few examples

Inequalities in well-being : income Large income inequalities in many OECD countries… 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

Inequalities in well-being: health Low-income people report lower health status

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 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 Hows 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 ?

Whats 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