15 days of Economics Day 4: Happyconomics

Nordic countries, notably Denmark and Norway, have always ranked very highly on the Global Happyness Report’s happiness rankings. This is important to explore as we strive to determine the best way to configure society and resource allocation for the maximum benefit of the Populus.

Map colored by World Happiness Report(2017) score

Before exploring what makes the top countries so happy it is important to note that fundamental demographic, economic, and social conditions make their success inapplicable in other countries. Additionally, the “happiness” here refers to satisfaction with life.

The main reasons for the success of the nordic nations in cultivating happiness are,

• Sufficient national income and equality. In these countries, people’s income is generally high enough to facilitate a high quality of life and a decent amount of consumption. Multiple studies have shown lack of wealth greatly decreases happiness but excessive wealth has a diminishing effect on happiness.
• Trustworthy, uncorrupt government. These countries have a high level of trust between the population and the government. This is useful for citizens to feel protected and well represented. This is partially due to the very low populations of these countries. For example, Denmark and Finland both have populations below five million. This enables people to feel more directly represented by the government.
• Well funded social services and substantial social safety net. These provide citizens with a sense of security and enables citizens to work out of passion as opposed to a necessity. However, this only possible because of the sufficient national income and trust in the government. The national income enables the programs to be funded through tax revenue. Most importantly, the Populus trusts the government to spend the money well whist the government trusts the Populus to return to work after some time of being on welfare.
• A healthy work-life balance. This is supported through national legislation the nordic countries fixing a minimum paid vacation requirement as well as paid maternity and paternity leave. However, this is foundationally a cultural factor that enables the pursuit of hobbies and personal interests. This is again supported by the sufficient national income that allows people to risk decreasing their productive output.

The UK placed 15th in the World Happyness Report in 2018. This is likely do to the UK’s relatively high GDP per capita of $42,000(2018). Unfortunately, a higher happiness score is difficult to achieve without increasing the trust in the government.