"It's Not Just About the Economy, Stupid": Prioritizing Well-Being to Build Resilient Societies. Insights from the OECD’s How’s Life? 2024 Report
Patricio V Marquez
December 5, 2024
On November 4-6, 2024, I attended the Organization for Economic Cooperation and Development (OECD)'s 7th World Forum on Well-being in Rome, Italy, that brought together experts, practitioners, and thought leaders to strengthen approaches for centering multidimensional well-being in policy, measurement, and societal action.
The discussions and insights from this event underscored the relevance of the OECD report “How’s Life? 2024 “ that was launched during the Forum and that offers a multidimensional snapshot of how people across its thirty-eight member countries are faring socially, economically, and environmentally.
In a world increasingly shaped by uncertainty, from the lingering effects of the COVID-19 pandemic to escalating cost-of-living pressures and climate crises, understanding well-being has never been more crucial. With over eighty indicators in its framework, the report provides a valuable lens through which to evaluate resilience and identify pathways toward a sustainable and inclusive future.
The main takeaways from the above-mentioned OECD report are presented and discussed below.
The Economic Resilience Paradox: Rising Incomes, Persistent Vulnerabilities
Governments worldwide responded swiftly to mitigate the economic fallout of recent crises, implementing policies that cushioned incomes and safeguarded employment. By 2022, the average disposable income in OECD countries reached $35,200 per capita, with employment rates climbing to historic highs by 2023.
However, beneath these promising numbers lies a troubling reality: the cost-of-living crisis continues to burden households, especially the most vulnerable. One in five low-income households spend over 40 percent of their income on housing. Additionally, the share of individuals reporting financial hardship remains high, highlighting the need for policies that address not just economic stability but also equitable access to necessities.
The Silent Crisis in Non-Economic Well-being
While economic metrics often dominate policy discussions, the report reveals that many non-economic dimensions of well-being are worsening:
- Health Declines: Life expectancy fell by nearly half a year across OECD countries, partly due to excess deaths and rising opioid use.
- Emotional Struggles: Feelings of sadness, loneliness, and pain have surged since 2019, with one-third of people reporting negative emotions daily.
- Educational Impacts: Disruptions during the pandemic resulted in a significant drop in student performance, with 16 percent of 15-year-olds now scoring poorly in key subjects.
These findings underline the importance of holistic approaches to recovery, where mental health, education, and community relationships are given equal priority alongside economic growth.
Inequality: Narrowing Gaps, But at What Cost?
The report highlights both progress and stagnation in addressing inequalities:
- Gender: Women are closing gaps in employment and safety but continue to experience lower life quality in areas such as health and social connectedness.
- Age: While younger people tend to have stronger social connections, they are increasingly vulnerable to declines in mental health and subjective well-being.
- Education: Those with tertiary education consistently enjoy better outcomes, from employment to emotional well-being. However, gaps for less-educated individuals remain stark.
Interestingly, some narrowing gaps result not from improvement for disadvantaged groups but from worsening conditions for those previously better off—a reminder that true equity requires universal progress.
Sustainability at a Crossroads
The report’s findings on environmental sustainability are sobering. Despite increased investments in renewable energy, reductions in greenhouse gas emissions remain insufficient to meet global targets. One in seven people now faces extreme heat conditions annually, a sharp rise compared to a decade ago.
Progress in biodiversity preservation and resource management has also slowed, underscoring the urgent need for policies that align economic and environmental agendas. Trust in institutions, essential for managing this transition, has begun to decline, highlighting the challenges of maintaining public confidence during complex systemic shifts.
A Vision for the Future: People-Centered and Forward-Looking Policies
The report advocates for a balanced, multidimensional approach to well-being that integrates economic, social, and environmental priorities. Key recommendations include:
• Better Data and Metrics: Expanding well-being indicators to guide policy decisions.
• Cross-Sector Coordination: Aligning health, education, and environmental goals with economic policies.
• Inclusive Policies: Ensuring that interventions address the needs of all population groups, particularly the most vulnerable.
As discussed in the Forum, initiatives like the OECD’s Knowledge Exchange Platform on Well-being Metrics offer practical tools to help governments embed these principles into their policymaking processes.
Conclusion
The findings of the OECD How’s Life? 2024 report remind us that progress is not just about bouncing back from crises but building a foundation for long-term resilience. By adopting a multidimensional perspective and prioritizing people’s well-being, policymakers can navigate the complex challenges of today’s world and address major societal shifts, from population aging to the deep structural transformation of digitalization and artificial intelligence (AI), and the already very real threat of climate change. This is needed to ensure a sustainable, equitable future for generations to come.
If this course of action is not heeded, the political ramifications could be profound and far-reaching. As highlighted by Professor Lord Richard Layard, Emeritus Professor of Economics at the London School of Economics, during one of the Forum’s panels, research conducted by Prof. George Ward and his collaborators on well-being and voting behavior in Europe and the United States reveals a striking finding: government elections are more accurately predicted by levels of life satisfaction than by traditional economic indicators.
The above realization should serve as a powerful reminder to all of us that it's not solely about 'the economy, stupid,' as was once widely asserted. Instead, what truly matters is how people feel—their well-being and life satisfaction.