They say that money can’t buy happiness, but how true is that? The United Nations Sustainable Development Solutions Network (UNSDSN) issued its annual World Happiness Report for 2018 last March, and the United States came in at No. 18 despite its recent economic progress.
That’s why a recent GOBankingRates analysis digs into the relative economic strengths of each of the 15 happiest countries in the world and compares them with the United States. The analysis found that there is one thing the five happiest countries have in common: higher incomes, based on figures from Trading Economics.
The 2018 World Happiness report found that top countries on its list have high values for the six key variables that support well-being: income, healthy life expectancy, social support, freedom, trust and generosity. This GOBankingRates analysis takes the final rankings from the World Happiness Report and then cross-references them with the countries’ average annual wages, average cost per month for renting a one-bedroom apartment in a city center and the unemployment rate in an attempt to find out if major financial factors correlate to overall happiness.
|Happiness Ranking||Country||Happiness Score||Average Wage (Annual)||Apartment (1 Bedroom) in City Centre (Rent Per Month)||Unemployment Rate|
One of the clearest correlations is between average annual wages and overall happiness, with the top five finishers for the happiness score representing five of the six top countries for highest average annual earnings. In fact, the five happiest countries in the world all have a higher annual wage than the U.S.
However, it would be incorrect to assume that a larger paycheck automatically leads to a higher level of happiness, as there are some interesting outliers that buck the overall trend.
Germany just barely makes the top 15 countries for happiness score. But based solely on the three economic factors in the GOBankingRates analysis, the country ranks pretty high. Germany’s 3.6 percent unemployment rate and average monthly rent of $823.93 are both the second lowest of the 16 countries included. Germany is also the one country outside the top five where the average wage was over $50,000 a year. And when combined with low average rents, that makes it the second lowest for the percentage of their average annual wages paid toward the average cost to rent.
Finland, likewise, makes it clear that, while economic factors seem important, there’s clearly more contributing to overall happiness. Finland residents have an average annual wage of just over $50,000 a year, making it the sixth highest on this list. However, the next four countries behind it on the happiness index all have significantly bigger paychecks, ranging from close to $18,000 more a year in Norway to just under $30,000 more in Switzerland.
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As strange as it is that Finland beat out several countries where workers are earning significantly more, it gets even murkier when you consider that Finland’s 8.8 percent unemployment rate is more than double that of the four countries where workers are earning so much more than their Finnish counterparts.
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Methodology: GOBankingRates used the 2018 World Happiness report to source the top 15 highest-ranking cities. From there, we determined the average annual wage and unemployment rate for each country (sourced from Trading Economics) as well as the monthly cost of a one-bedroom apartment in a city center (sourced from Numbeo) to identify correlations between economic factors and overall happiness.
All information in this article is accurate at the time the study was conducted in April 2018.