How’s Life? is part of the OECD Better Life Initiative, which aims to promote “Better Policies for Better Lives”, in line with the OECD’s overarching mission. It is a statistical report released every two to three years that documents a wide range of well-being outcomes and how they vary over time, between population groups, and across countries. This assessment is based on a multi-dimensional framework covering 11 dimensions of current well-being and four different types of systemic resources that help to support well-being over time. This fifth edition of the OECD’s How’s Life? report charts whether life is getting better for people in 37 OECD countries and 4 partner countries, and presents the latest evidence from an updated set of over 80 well-being indicators. For the first time, How’s Life? 2020 is also accompanied by a publically accessible well-being database, available online at OECD.Stat (http://stats.oecd.org/wbos/default.aspx?datasetcode=HSL).

On 25 May 2018, the OECD Council invited Colombia to become a Member. While Colombia appears in the list of OECD Members and is included in the OECD averages reported in this publication, at the time of its preparation, Colombia was in the process of completing its domestic procedures for ratification and the deposit of Colombia’s instrument of accession to the OECD Convention was pending.

The good news is that well-being has, in some respects, improved relative to 2010 – a year when the impacts of the financial crisis continued to be deeply felt in many OECD countries. We are living longer, safer lives. Across OECD countries, life expectancy has increased by more than one year, with the average baby born today living to over 80 years of age. The OECD average homicide rate has fallen by one-third since 2010, road deaths are down, and people feel safer when walking alone at night in their neighbourhoods. One in eight households live in overcrowded conditions, 3 percentage points fewer than in 2010. Income and jobs are on the rise - with both the employment rate and average household incomes increasing since 2010 by over 5 percentage points. Today, almost eight in every ten adults are in paid employment. Recent surveys suggest people are more satisfied with their lives, relative to how they felt in 2013.

In many respects, people’s well-being has improved in OECD countries since 2010. However, progress has been slow or deteriorated in some dimensions of life, including how people connect with each other and with their government. Large gaps by gender, age and education persist across well-being outcomes. Generally, OECD countries that do better on average tend to have greater equality between population groups and fewer people living in deprivation. The greatest gains in current well-being have often been concentrated in countries that had weaker well-being at the start of the decade. While these gains have sometimes gone hand in hand with recent GDP growth, this has not always been so, underscoring the need to look beyond GDP when measuring progress. Gains in current well-being have often not been matched by improvements in the resources needed to sustain it over time, with systemic risks emerging across Natural, Human, Economic and Social Capital.

Together, income and wealth shape households’ economic well-being. Since 2010, OECD average household disposable income per capita has increased by 6%, cumulatively. Meanwhile, household median net wealth has fallen by 4%. In European OECD countries, 1 in 5 households find it difficult to make ends meet, and across the OECD nearly 1 in 8 live in relative income poverty. Additionally, more than 1 in 3 households are financially insecure, meaning that, while not currently income poor, they would be at risk of falling into poverty if they had to forgo 3 months of income. On average, people in the top 20% of the income distribution earn 5.4 times more than people in the bottom 20%. The wealthiest 10% of households own more than half of all household wealth. Younger people are more likely to live in households with lower income and wealth, and are at greater risk of poverty.

Housing provides shelter, safety, privacy and personal space. The area where people live also determines their access to many different services. Since 2010, there have been some improvements in OECD average housing conditions. Both the extent of overcrowding and the share of poor households lacking basic sanitation have fallen, though large differences across countries persist. The share of households living in overcrowded conditions in 2017 was 30% or higher in Mexico, Latvia and Poland, but 2% or less in Ireland and Japan. The share of poor households lacking access to basic sanitation in OECD countries ranges from over 25% to almost zero. OECD households spend, on average, around 21% of their disposable income on housing costs, but nearly 1 in 5 lower-income households spend more than 40%. Since 2010, the share of households with high-speed internet access has risen markedly, from 63% to 85%.

This chapter addresses both the quantity of jobs and their quality – i.e. the material and non-material aspects of people’s working conditions. Since 2010, Work and Job Quality has generally improved across OECD countries: employment rates among adults have risen by 5 percentage points, and real earnings have increased, on average, by 7%, cumulatively. Long-term unemployment, the share of youth not in employment, education or training (NEET), labour market insecurity, the number of employees working long hours and job strain have each improved for the OECD on average – though not for all countries. Women are less likely to be employed and more likely to be long-term unemployed or NEET, relative to men. Men earn 13% more than women, but have higher rates of job strain and are more likely to regularly work long hours. Young adults and those without a tertiary education fare less well than older and more educated workers.

Health is about being and feeling well: a long life unencumbered by physical or mental illness, and the ability to participate in activities that people value. Average life expectancy at birth in OECD countries is 80.5 years, and two-thirds of adults report good health. Suicide, acute alcohol abuse and drug overdose cause 2% of all deaths. In European OECD countries, 6% of adults recently experienced depressive symptoms. Since 2010, life expectancy has increased almost everywhere, but is showing signs of plateauing in some countries. Trends in perceived health, suicide and substance abuse deaths diverged between countries. Women live longer than men, but report worse health and higher rates of depressive symptoms. Four times more men than women die from suicide and substance abuse, although female deaths from these causes have risen in more than one-third of OECD countries since 2010. There are large education- and income-related inequalities in health.

Knowledge and Skills are about what people know and can do. This chapter discusses the results of the OECD’s PISA tests of cognitive skills in maths, reading and science at age 15; and adult numeracy and literacy, as assessed through the OECD’s PIAAC study. Over the last decade or so, average scores in maths, reading and science for students at 15 have fallen in around one-quarter of OECD countries. Around 1 in every 8 students has a very low score in all three PISA subjects, and around 16% of adults have very low scores in both literacy and numeracy. Among both youths and adults, men perform better than women in mathematics, while girls tend to outperform boys in reading. There are large inequalities in skills at age 15 by socio-economic background. Older adults (aged 45-65) fare worse in literacy and numeracy tests compared to younger cohorts (aged 16-44).

Environmental Quality is about environmental hazards and amenities – illustrated here by air quality and access to green space. Nearly two-thirds of people in OECD countries are exposed to dangerous levels of fine particulate matter (PM2.5) air pollution. Although levels have generally improved since 2005, this has not always occurred where the situation was most critical: in one-quarter of OECD countries, all (or almost all) of the population remains exposed to dangerous levels of PM2.5. Differences within countries can be as large as differences between countries: dangerous levels of PM2.5 exposure can concern less than 1% of the population in one region, while affecting 100% in another. Almost 7% of people living in European cities lack access to green areas in their neighbourhood; comparable data for other OECD countries still need to be developed.

Subjective Well-being is about good mental states, and how people experience their lives. Average life satisfaction (measured on a 0-10 scale) ranges from below 6 to above 8 across OECD countries. Between 2013 and 2018, average levels of life satisfaction increased slightly, from 7.2 to 7.4 (based on data from 27 OECD countries). Nevertheless, a sizeable share of the population (around 7% on average) still report very low levels of life satisfaction, and around 1 in 8 people experience more negative than positive feelings in a typical day. Average life satisfaction is very similar for men and women, but in close to half of OECD countries the share of women reporting more negative than positive feelings is higher than the share of men. There are age- and education-related inequalities in Subjective Well-being, and countries with larger inequalities tend to also experience lower average scores.

Safety is about freedom from harm – whether that harm comes in the form of crime, conflict, violence, terrorism, accidents or natural disasters. Across OECD countries, the homicide rate has fallen by one-third since 2010, to just over 2 per 100 000 people. 71% of people in OECD countries report feeling safe when walking alone at night, up from 67% in 2010-12. Among the 31 OECD countries with available data, road deaths have fallen by over 20%, on average since 2010. While 79% of men feel safe when walking alone at night, only 62% of women do. Nevertheless, the gap between men and women has narrowed since 2006-12. The middle-aged and tertiary-educated tend to feel safer, on average, than groups of other ages and education. Men are at higher risk of homicide than women in all but four OECD countries.

Work-Life Balance is about being able to combine family commitments, leisure and work – including both paid and unpaid work. Across OECD countries, the average time spent on leisure and personal care by full-time employed people ranges from around 14 to 16.5 hours per day. Full-time employed men enjoy 30 minutes more leisure and personal care time relative to women, while the young and old spend 50 and 25 minutes more than the middle-aged, respectively. In the 13 OECD countries with available data, the share of the population working long hours in unpaid work ranges from 7% to 17%. When considering both paid and unpaid working time together, women work, on average, 25 minutes longer per day than men do. Average satisfaction with time use, measured on a 0-10 scale, never exceeds 8 and can be as low as 5.6. Middle-aged people are consistently the least satisfied with their time use.

Social Connections address both the quantity and quality of time spent with others, and how much support people feel they have. Despite differences in the amount of time spent socialising, people’s own evaluations of their social connections are mostly positive and fairly similar across OECD countries. On average, people are highly satisfied with their social relationships (8.1 on a 0-10 scale), and 90% feel that they have someone they can count on in times of need. Even though men spend, on average, 40 minutes less than women in social interactions per week, gender differences in satisfaction with social relationships are negligible. Older people spend less time in social interactions and have less social support, but their satisfaction with social relationships is not significantly lower than for younger people. People with lower educational attainment are more likely than their more educated peers to lack social support.

Civic Engagement is about whether citizens can and do take part in important civic activities that enable them to shape the society they live in. Voter turnout in OECD countries has remained relatively stable since 2010-13, and was around 69% between 2016-19. By contrast, only 1 in 3 people in OECD countries feel that they have a say in what the government does. While older people are more likely to vote, the middle-aged are most likely to feel they have a say – though these patterns vary across OECD countries. 84% of people who have finished tertiary education say they voted, compared to 78% of those educated to secondary level. Gender differences are generally small – and parity has been reached for the OECD on average in both voter turnout and having a say in government. Nevertheless, some countries still have gender gaps in this domain, and these tend to favour women.

Economic capital includes both produced (man-made) and financial assets. While the OECD average situation since 2010 has improved slightly for several (but not all) Economic Capital indicators, large disparities persist across OECD countries, and have in some cases widened. The OECD average stock of produced fixed assets increased by 11%, cumulatively, between 2010 and 2018, and intellectual property assets by 16%. However, annual growth in gross fixed capital formation in 2018 was lower than in 2010 for around one-third of OECD countries, and rates of R&D investment have only increased in around half. OECD countries’ net financial positions have diverged further since 2010, and the gap between the top and bottom OECD countries has widened for the financial net worth of the general government sector. Household debt levels across OECD countries range from 200% of disposable income to less than 50%.

Natural Capital concerns both natural assets (e.g. natural land cover, biodiversity) and ecosystems and their services (e.g. oceans, forests, soil and the atmosphere). This chapter examines stocks and flows into and out of these natural systems, as well as risk and resilience factors affecting them. The share of land covered by natural vegetation ranges from 6% to 90% across OECD countries, and those with the lowest stocks are experiencing some of the greatest losses. More marine and land areas in OECD countries have been given protected status since 2010, but species diversity (measured by the Red List Index) is under greater threat. Total OECD greenhouse gas emissions from production have fallen by 4% since 2010, but on a global level they have increased 1.5 fold since 1990. Renewables play a minor role in most OECD countries’ energy mix, and material footprints per capita have increased since 2010.

Human Capital refers to the knowledge, competencies, skills and health status of individuals, which are viewed here from the perspective of their contribution to future well-being. The performance of OECD countries regarding human capital is mixed. While progress has been made in raising the educational attainment of the youth population, large gaps between countries remain. Labour market underutilisation, which poses risks to human capital through the degradation of skills, has improved since 2010 for most OECD countries. Only one country experienced an increase in premature mortality over the past decade. In terms of risk to future health status, smoking prevalence has declined steadily since 2005 in all but two OECD countries. However, obesity remains a major risk to human capital, with the large majority of OECD countries experiencing rising obesity rates over that same period.

Social Capital is about the social norms, shared values and institutional arrangements that foster co-operation among population groups. Around one in six people in OECD countries volunteer at least once a month through formal organisations (such as charities). When people are asked about their trust on a scale from 0 (no trust) to 10 (complete trust), the average score for trust in others is 6.1, and 6.3 for trust in the police. Less than half of OECD populations (43%) trust their government. Governments score 2.2 (out of 4) for formally engaging citizens when developing laws. For perceived public sector corruption, on a scale from 0 (highly corrupt) to 100 (very clean), the average OECD country scores 67. Gender parity in politics has not yet been achieved: women hold just 28% of parliamentary seats. Compared to 2010, progress on Social Capital has been slow or stagnant for OECD countries on average.