WELFARE, WEALTH AND WORK A NEW GROWTH PATH FOR EUROPE A European research consortium is working on the analytical foundations for a new socio-ecological growth model ALTERNATIVE INDICATORS FOR WELLBEING Claudia Kettner Wachstum im Wandel, 22 nd February 2016, Vienna This project has received funding from the European Union s Seventh Framework Programme for
Motivation GDP p.c. in constant PPS Index (Austria 1990 = 100) 200 150 100 50 GDP per capita 1990-2013: +40% Wellbeing 1990-2013: + / -??? Source: IEA Database 0 1990 1995 2000 2005 2010 Austria OECD 2 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
Why shall we go beyond GDP? GDP is a mere measure of production What really matters to people wellbeing is not reflected Social aspects are not accounted for Environment and planetary boundaries are not accounted for What is not measured is not managed GDP is not enough for informed policy making 3 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
Wellbeing vs. Sustainable Development? Wellbeing Objective WB: Material and social circumstances influencing an individual s or community s sense of WB Subjective WB: Individual s self-assessment of own WB Sustainable development: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs (WCED, 1987) Tradeoff between current WB and future WB due to short-term perspective, often environmental aspects are neglected 4 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
An Integrated Perspective Sustainable Wellbeing Source: Adapted from Oxfam (2012, 2014) 5 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
How to measure wellbeing? Types of indicators Corrected GDP Composite Indicators Indicator Sets Examples MEW ISEW Green GDP HDI GPI OECD BLIs EU SDIs UN ISDs Caveats Selection of variables Monetarization Selection of variables Aggregation Selection of variables Communication Indicator Sets are most suitable for measuring wellbeing Capture broad range of relevant aspects No problems of aggregation 6 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
Example: OECD Better Life Indicators (I) Topic Housing Income Jobs Community Education Environment Civic engagement Health Life Satisfaction Safety BLI Indicators Rooms per person Housing expenditure Indicator Dwellings with basic facilities Household disposable income Household financial wealth Employment rate Long-term unemployment rate Personal earnings Job security Social network (Quality of support network) Educational attainment Years in education Students skills Air pollution Water quality Voter turnout Consultation on rule-making Life expectancy Self-reported health Life Satisfaction Homicide rate Assault rate Austria s Performance 2015 BLI E. Rooms per person Housing expenditure Dwellings with basic Household disposable Household financial Employment rate Long-term Personal earnings Job security Social network (Quality Educational attainment Years in education Students skills Air pollution Water quality Voter turnout Consultation on rule- Life expectancy Self-reported health Life Satisfaction Homicide rate Assault rate Employees working very Work-life Employees working very long hours Time devoted to leisure 7 Kettner balance WiW, 22.2.2016 Time devoted to leisure and personal This care project has received funding from the European Union s Seventh Framework Programme for research, technological development and demonstration 0.00 under 0.20 grant 0.40 agreement 0.60 0.80 No. 290647. 1.00 Source: OECD - BLI 2015 edition
Example: OECD Better Life Indicators (II) Development of BLIs in Austria Topic Indicator Unit BLI E. 2013 BLI E. 2015 Housing Income Jobs Rooms per person ratio 1,70 1,60 Housing expenditure % 21,00 21,00 Dwellings with basic facilities % 98,80 99,00 Household disposable income USD 28.852 31.173 Household financial wealth USD 47.458 49.887 Employment rate % 72,00 72,00 Long-term unemployment rate % 1,07 1,19 Personal earnings USD 43.688 45.199 Job security % - 3,90 Community Social network (Quality of support network) % 94,00 89,00 Education Environment Civic engagement Health Educational attainment % 82,00 83,00 Years in education years 16,90 17,00 Students skills average score 487 500 Air pollution Mg / m 3 27,00 27,00 Water quality % 96,00 94,00 Voter turnout % 82,00 75,00 Consultation on rule-making average score 7,10 7,10 Life expectancy years 81,10 81,00 Self-reported health % 69,00 69,00 Life Life Satisfaction average score 7,40 6,90 Safety Homicide rate homicides per 100,000 0,60 0,40 Assault rate % 3,00 3,40 Work-life Employees working very long hours % 8,76 7,61 balance Time devoted to leisure and personal care hours 14,46 14,46 8 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for No updated data available Source: OECD - BLI 2015 edition
Conclusions What is not measured is not managed Inclusion of wellbeing indicators in macroeconomic analysis and economic policy decisions is limited Plethora of alternative measures for wellbeing and sustainable development is available High level effort required to achieve not only development of indicators but their implementation Environmental aspects essential for (long-term) wellbeing integration in indicator sets essential 9 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
Thank you! 10 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for
Standardiation methodology BLI For each indicator the values are standardised according to the following equation CI j = (I j I min ) / (I max I min ) For indicators that measure a negative component of well-being (e.g. unemployment): CI j = 1 (I j I min ) / (I max I min ) CI... Converted indicator I... Indicator j... Country 11 Kettner WiW, 22.2.2016 This project has received funding from the European Union s Seventh Framework Programme for