Presentation at the HLEG thematic workshop on "Multidimensional Subjective Well-being", 30-31 October 2014, Turin, Italy, http://oe.cd/HLEG-workshop-subjective-wb-2014

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