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Wellbeing and happiness in OECD countries


  • Greg Coombs

    (Treasury, Government of Australia)


GDP per capita is the most commonly used measure of a country’s economic success, yet it is frequently criticised as a guide to a nation’s wellbeing. A recently released study by the OECD considers some alternatives. The OECD uses illustrative calculations to ‘extend’ GDP to include leisure time, the sharing of income within households and income distribution. A key result of the study is that cross-country ranking based on these indicators and GDP per capita are generally similar, giving support to the conclusion that GDP per capita can serve as a reasonable proxy of overall wellbeing. Also, the OECD researchers find that survey-based data on happiness and life satisfaction across OECD countries are only weakly related to levels of GDP per capita. This article briefly explores the findings of the OECD’s study, and reflects on some of the difficulties in attempting to develop other indicators of wellbeing.

Suggested Citation

  • Greg Coombs, 2006. "Wellbeing and happiness in OECD countries," Economic Roundup, The Treasury, Australian Government, issue 2, pages 11-21, May.
  • Handle: RePEc:tsy:journl:journl_tsy_er_2006_2_2

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    References listed on IDEAS

    1. Romina Boarini & Åsa Johansson & Marco Mira d'Ercole, 2006. "Alternative Measures of Well-Being," OECD Economics Department Working Papers 476, OECD Publishing.
    2. Andrew Leigh & Justin Wolfers, 2006. "Happiness and the Human Development Index: Australia Is Not a Paradox," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(2), pages 176-184, June.
    3. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    4. John F. Helliwell, 2006. "Well-Being, Social Capital and Public Policy: What's New?," Economic Journal, Royal Economic Society, vol. 116(510), pages 34-45, March.
    5. Romina Boarini & Åsa Johansson & Marco Mira d'Ercole, 2006. "Alternative Measures of Well-Being," OECD Social, Employment and Migration Working Papers 33, OECD Publishing.
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    More about this item


    wellbeing; GDP per capita; GDP; OECD; Organisation for Economic Co-operation and Development; income distribution; living standards;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply


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