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The OECD Better Life Initiative. Romina Boarini, Head of Monitoring Well-Being and Progress OECD Statistics Directorate London School of Economics 20 June 2013. Outline. Context OECD Better Life Initiative What’s next. The demand to go “beyond GDP”.
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The OECD Better Life Initiative Romina Boarini, Head of Monitoring Well-Being and Progress OECD Statistics Directorate London School of Economics 20 June 2013
Outline • Context • OECD Better Life Initiative • What’s next
The demand to go “beyond GDP” • From a statisticalperspective: 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 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-FitoussiCommission • 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
A global agenda Source: Australian Bureau of Statistics
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
OECD Better Life Initiative Your Better Life Index A tool for learning what matters most topeople’s well-being How’s Life First attempt at an international level to present a comprehensive set of well-being indicators
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)
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
Which dimensions? Personal Security Work-Life Balance Social Connections Income and Wealth Civic Engagement Jobs Environment Housing Health Education Life Satisfaction
Why these dimensions • 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
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
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
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
Selected results from How’s Life? 2011 • No countryis 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
No country is the champion of well-being Good performance, percentage of green lights Poor performance, percentage ofred lights Source : OECD calculations
How’s life for the average German/British household? Source : OECD calculations
Global participation Top 10 United States France Canada United Kingdom Germany Australia Italy Japan Spain Mexico Nearly two visits from over 180 countries
What mattersmostto people ? Weightsgiven by users (in %) Source: OECD calculations
2013-2014 developmentsof 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
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?
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
From measurement to policy “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
How well-being informs the policy agenda: the “WHAT” to do • Amore comprehensive and balancedview 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
How well-being informs the policy agenda: the “HOW” to do • 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
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
Continued interaction with research community and civil society • 5th World Forum in Mexico in 2015 A platform for global discussion on well-being; Research Networks in many regions
THANK YOU! www.oecd.org/measuringprogress www.oecdbetterlifeindex.org