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POLICY USES OF SUBJECTIVE WELL-BEING 
MEASURES 
Martine Durand 
OECD Chief Statistician and Director of the Statistics Directorate 
High Level Expert Group on the Measurement of Economic 
Performance and Social Progress 
Workshop on Multidimensional Subjective Well-being 
30-31 October 2014, Turin
The OECD context 
• OECD has been at the forefront of the international measurement 
agenda on well-being, including subjective well-being (SWB) 
• Now beginning to mainstream adoption of a well-being approach in 
the organisation’s wider policy work 
• Part of OECD’s New Approaches to Economic Challenges (NAEC) 
initiative 
o Multidimensional approach 
o Developing better tools for more integrated policy analysis 
o Gaining expertise in experimental and behavioural sciences 
• This includes introducing SWB into some of our policy analysis…
Steps to introduce SWB in OECD 
analysis 
1. Complementing other measures of well-being 
• Monitoring progress: is life getting better, and for whom? 
• Inclusive growth: multidimensional living standards 
2. Analysis of policy impacts and the determinants of SWB 
• What underpins SWB resilience and vulnerability? 
• How can policy (or more informed citizens) make a difference? 
3. Other possible applications (not yet tested by OECD) 
• Are there behavioural insights from SWB that could make policies more 
effective? (several govts now have Behavioural Insights Units: UK, United 
States, Netherlands, and New South Wales Govt, Australia) 
• A new method for valuing non-market factors in cost-benefit analysis (e.g. 
Legatum Commission 2014; Fujiwara and Campbell, 2011)
SWB complementing existing measures 
of well-being: OECD examples 
• How’s Life? Measuring Well-Being (2013, 
2011) Includes life evaluations as a headline 
indicator, alongside measures for 10 other well-being 
dimensions 
• Multi-dimensional Country Reviews: 
Monitoring well-being outcomes - including life 
evaluations - in a development context (e.g. 
Myanmar, Uruguay, Philippines…) 
• Well-being in OECD Economic Surveys (e.g. 
Austria 2013, United States 2014, Mexico 
forthcoming, Italy, forthcoming): moving beyond 
traditional economic goals to also address well-being 
needs
Inclusive growth: Developing a measure 
of multidimensional living standards 
5 
1) What kind of growth? 
Life evaluations used two ways: 
i) To select the domains of well-being considered (3 included so far) 
Income 
Jobs 
Health 
ii) To estimate the « equivalent income » losses associated with the gap in unemployment 
and the gap in life expectancy, both relative to the top OECD performer. 
 then aggregated into a measure of multidimensional living standards 
2) And whose growth? 
• Average multidimensional living standards adjusted to reflect situation of target groups (e.g. 
the median income household, or those at the bottom of the income distribution) 
• Assess trends in multidimensional living standards over time, and among different groups of 
households
Understanding when, where and how 
policy can make a difference 
e.g. OECD Employment, Labour and Social Affairs Directorate: The impact of changes 
in birth-related leave policies on life satisfaction in Europe (D’Addio et al., 2014): 
Part 1) Changes in life satisfaction among women aged 20-39 years (vs. older women) 
before and after the introduction of birth-related leave policy reforms (Eurobarometer 
data) 
• Some, but not all, policy reforms were associated with an increase in life satisfaction 
among women potentially eligible for birth-related leave (relative to control group). 
Part 2) Evaluation techniques with panel data using policy reforms to build a quasi-natural 
experiment for Germany (1984-2008) and the United Kingdom (1996-2006) 
• Women on birth-related leave have higher life satisfaction controlling for observable 
and unobservable personal characteristics 
• Difference-in-differences estimation again suggests some, but not all, policy reforms 
have a significant effect on life satisfaction 
Source: D’Addio, et al. (2014), "Using a quasi-natural experiment to identify the effects of birth-related leave policies on subjective 
well-being in Europe", OECD Journal: Economic Studies, Vol. 2013/1. 10.1787/eco_studies-2013-5k3tvtg6fvmq
What underpins SWB resilience and 
vulnerability? Longitudinal and cohort studies 
e.g. OECD Education Directorate Skills for Social Progress Project: considering 
the impact of both cognitive and social and emotional skills on a wide range of 
material and non-material outcomes, including SWB 
New Zealand: Probability of being “very happy” at age 20, based on self-reports 
50% 
40% 
30% 
20% 
10% 
0% 
1 2 3 4 5 6 7 8 9 10 
Deciles of cognitive skills 
(measured at age 8) 
Source: OECD (forthcoming), “Skills for Social Progress" 
50% 
40% 
30% 
20% 
10% 
0% 
1 2 3 4 5 6 7 8 9 10 
Deciles of social and emotional skills 
(measured at age 8) 
Note: Longitudinal analyses conducted by OECD, based on data from the Competent Children, Competent Learners study. Solid lines depict the 
probability of being happy at age 20 based on self-reports, and thin lines, 2.5%-97.5% confidence intervals. Cognitive skills are captured by latent 
cognitive skill factor estimated using measures of achievement tests and problem solving tests at age 8. Social and emotional skills are captured by 
latent social and emotional skill factor estimated using measures of perseverance, responsibility and social skills, also at age 8.
OECD Economics Directorate: 
• Major drivers of life satisfaction (e.g. income, health, 
unemployment, social relationships) seem reasonably consistent across 
OECD countries 
• Challenges around work-life balance in the United States, their 
implications for well-being, and the policy options that can improve life 
for working families 
OECD Environment Directorate: 
• Actual (PM10 air pollution) and perceived (satisfaction with air quality; 
satisfaction with city beauty/physical setting) environmental quality 
has a significant effect on life satisfaction 
• Relationship between urban structure (land use, population density, 
compactness) and life satisfaction in 33 cities across five countries 
8 
…from work-life balance to 
environmental quality
Issues going forward 
(1) Building a high-quality evidence base for policy takes time: 
• Routine large-scale data collections from NSOs will be important 
 Need for consistent methods to build up a time-series 
 Need for large samples to understand specific target groups 
Risk that SWB measures are dropped before we can fully assess 
their usefulness? 
• Longitudinal panel data and cohort studies (causality; adaptation) 
• Time use data and specialist surveys (e.g. health surveys) 
(2) Challenges of integrating SWB alongside other measures of well-being 
in policy analysis 
• OECD Inclusive Growth project: examining policy trade-offs 
• OECD New Approaches to Economic Challenges (NAEC) initiative

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  • 1. POLICY USES OF SUBJECTIVE WELL-BEING MEASURES Martine Durand OECD Chief Statistician and Director of the Statistics Directorate High Level Expert Group on the Measurement of Economic Performance and Social Progress Workshop on Multidimensional Subjective Well-being 30-31 October 2014, Turin
  • 2. The OECD context • OECD has been at the forefront of the international measurement agenda on well-being, including subjective well-being (SWB) • Now beginning to mainstream adoption of a well-being approach in the organisation’s wider policy work • Part of OECD’s New Approaches to Economic Challenges (NAEC) initiative o Multidimensional approach o Developing better tools for more integrated policy analysis o Gaining expertise in experimental and behavioural sciences • This includes introducing SWB into some of our policy analysis…
  • 3. Steps to introduce SWB in OECD analysis 1. Complementing other measures of well-being • Monitoring progress: is life getting better, and for whom? • Inclusive growth: multidimensional living standards 2. Analysis of policy impacts and the determinants of SWB • What underpins SWB resilience and vulnerability? • How can policy (or more informed citizens) make a difference? 3. Other possible applications (not yet tested by OECD) • Are there behavioural insights from SWB that could make policies more effective? (several govts now have Behavioural Insights Units: UK, United States, Netherlands, and New South Wales Govt, Australia) • A new method for valuing non-market factors in cost-benefit analysis (e.g. Legatum Commission 2014; Fujiwara and Campbell, 2011)
  • 4. SWB complementing existing measures of well-being: OECD examples • How’s Life? Measuring Well-Being (2013, 2011) Includes life evaluations as a headline indicator, alongside measures for 10 other well-being dimensions • Multi-dimensional Country Reviews: Monitoring well-being outcomes - including life evaluations - in a development context (e.g. Myanmar, Uruguay, Philippines…) • Well-being in OECD Economic Surveys (e.g. Austria 2013, United States 2014, Mexico forthcoming, Italy, forthcoming): moving beyond traditional economic goals to also address well-being needs
  • 5. Inclusive growth: Developing a measure of multidimensional living standards 5 1) What kind of growth? Life evaluations used two ways: i) To select the domains of well-being considered (3 included so far) Income Jobs Health ii) To estimate the « equivalent income » losses associated with the gap in unemployment and the gap in life expectancy, both relative to the top OECD performer.  then aggregated into a measure of multidimensional living standards 2) And whose growth? • Average multidimensional living standards adjusted to reflect situation of target groups (e.g. the median income household, or those at the bottom of the income distribution) • Assess trends in multidimensional living standards over time, and among different groups of households
  • 6. Understanding when, where and how policy can make a difference e.g. OECD Employment, Labour and Social Affairs Directorate: The impact of changes in birth-related leave policies on life satisfaction in Europe (D’Addio et al., 2014): Part 1) Changes in life satisfaction among women aged 20-39 years (vs. older women) before and after the introduction of birth-related leave policy reforms (Eurobarometer data) • Some, but not all, policy reforms were associated with an increase in life satisfaction among women potentially eligible for birth-related leave (relative to control group). Part 2) Evaluation techniques with panel data using policy reforms to build a quasi-natural experiment for Germany (1984-2008) and the United Kingdom (1996-2006) • Women on birth-related leave have higher life satisfaction controlling for observable and unobservable personal characteristics • Difference-in-differences estimation again suggests some, but not all, policy reforms have a significant effect on life satisfaction Source: D’Addio, et al. (2014), "Using a quasi-natural experiment to identify the effects of birth-related leave policies on subjective well-being in Europe", OECD Journal: Economic Studies, Vol. 2013/1. 10.1787/eco_studies-2013-5k3tvtg6fvmq
  • 7. What underpins SWB resilience and vulnerability? Longitudinal and cohort studies e.g. OECD Education Directorate Skills for Social Progress Project: considering the impact of both cognitive and social and emotional skills on a wide range of material and non-material outcomes, including SWB New Zealand: Probability of being “very happy” at age 20, based on self-reports 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 Deciles of cognitive skills (measured at age 8) Source: OECD (forthcoming), “Skills for Social Progress" 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 Deciles of social and emotional skills (measured at age 8) Note: Longitudinal analyses conducted by OECD, based on data from the Competent Children, Competent Learners study. Solid lines depict the probability of being happy at age 20 based on self-reports, and thin lines, 2.5%-97.5% confidence intervals. Cognitive skills are captured by latent cognitive skill factor estimated using measures of achievement tests and problem solving tests at age 8. Social and emotional skills are captured by latent social and emotional skill factor estimated using measures of perseverance, responsibility and social skills, also at age 8.
  • 8. OECD Economics Directorate: • Major drivers of life satisfaction (e.g. income, health, unemployment, social relationships) seem reasonably consistent across OECD countries • Challenges around work-life balance in the United States, their implications for well-being, and the policy options that can improve life for working families OECD Environment Directorate: • Actual (PM10 air pollution) and perceived (satisfaction with air quality; satisfaction with city beauty/physical setting) environmental quality has a significant effect on life satisfaction • Relationship between urban structure (land use, population density, compactness) and life satisfaction in 33 cities across five countries 8 …from work-life balance to environmental quality
  • 9. Issues going forward (1) Building a high-quality evidence base for policy takes time: • Routine large-scale data collections from NSOs will be important  Need for consistent methods to build up a time-series  Need for large samples to understand specific target groups Risk that SWB measures are dropped before we can fully assess their usefulness? • Longitudinal panel data and cohort studies (causality; adaptation) • Time use data and specialist surveys (e.g. health surveys) (2) Challenges of integrating SWB alongside other measures of well-being in policy analysis • OECD Inclusive Growth project: examining policy trade-offs • OECD New Approaches to Economic Challenges (NAEC) initiative