Unlocking Happiness: Lessons from Europe’s Approach to Work and Life

In recent years, the conversation on work-life balance, productivity, and overall well-being has intensified. Arguably, theCOVID effect. A comparative analysis of the United States and the European Union over the last decade provides a rich tapestry of insights. It underscores fundamental differences in approaches to work, quality of life, and happiness. As we delve into this data, we uncover key issues and lessons that can reshape our understanding of what it means to lead a productive and fulfilling life.

The Metrics of Comparison

To ground this discussion, I focus on four critical metrics: Gross Domestic Product (GDP), Annual Working Hours, Quality of Life, and Happiness. These metrics are interwoven, each influencing the others in significant ways. GDP represents economic output, annual working hours reflect labour inputs, while quality of life and happiness indices provide a measure of well-being and life satisfaction.

Let’s chart these factors over the last 10 years 2014–2024 and see what they look like. You will note one thing quite jarring; there is almost a direction inverse relationship between GDP and both quality of life and happiness. You will also note declining working hours on both sides of the Atlantic over that decade.

Let’s now take a quick look at each and then consider that this all means.

GDP: The Economic Juggernaut

The GDP of both the US and the EU has shown steady growth over the past decade. The US GDP rose from approximately 17.5 trillion USD in 2014 to 24.2 trillion USD in 2023. The EU’s GDP, while lower, also exhibited growth, increasing from 16.3 trillion USD to 20.8 trillion USD in the same period. This economic growth is a testament to the robust economic structures and policies in place in both regions.

However, remember the GDP measure’s inventor, Simon Kuznets himself acknowledged the limitations of GDP as a measure of societal well-being. He cautioned against using GDP as a comprehensive indicator of a country’s overall health and prosperity.

“The welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP”— Kuznetz.

So, GDP alone cannot paint for us a complete picture of a nation’s true health. It is a metric of economic output but does not account for the well-being of individuals within the economy. This brings us to the next critical metric: annual working hours.

Annual Working Hours: The Effort Exerted

Happiness, often considered the ultimate goal of human existence, is measured through surveys that capture individuals’ self-reported life satisfaction. The World Happiness Report provides valuable insights into this metric.

Both the US and EU have seen increases in happiness indices over the past decade. In 2014, the US happiness index was 6.9, while the EU was slightly higher at 7.2. By 2023, the EU had opened the gap a little. These indices had increased to 7.3 and 7.7, respectively.

The higher happiness levels in the EU can be linked to the same factors that improve quality of life: healthcare, work-life balance, and environmental quality. Additionally, social cohesion and trust in institutions, which tend to be stronger in European countries, play a significant role in enhancing happiness.

Quality of Life: Beyond Economic Output

Quality of life is a multidimensional concept encompassing various factors such as health, education, income, environment, and work-life balance. The OECD Better Life Index provides a comprehensive measure of this concept.

Over the past decade, the quality of life in both the US and the EU has improved. However, the EU consistently scores higher. In 2014, the quality of life index was 7.6 in the EU and 7.1 in the US. By 2023, these scores had risen to 8.2 and 7.8, respectively.

The higher quality of life in the EU can be attributed to several factors. Firstly, European countries generally have more comprehensive healthcare systems, ensuring better health outcomes for their citizens. Secondly, the emphasis on work-life balance allows individuals more time to pursue personal interests and spend time with family, contributing to higher life satisfaction. Finally, environmental policies in Europe tend to be more stringent, leading to better air and water quality, which directly impacts well-being.

Happiness: The Ultimate Goal

Happiness, often considered the ultimate goal of human existence, is measured through surveys that capture individuals’ self-reported life satisfaction. The World Happiness Report provides valuable insights into this metric.

Both the US and EU have seen increases in happiness indices over the past decade. In 2014, the US happiness index was 6.9, while the EU was slightly higher at 7.2. By 2023, these indices had increased to 7.3 and 7.7, respectively.

The higher happiness levels in the EU can be linked to the same factors that improve quality of life: healthcare, work-life balance, and environmental quality. Additionally, social cohesion and trust in institutions, which tend to be stronger in European countries, play a significant role in enhancing happiness.

Key Issues and Lessons

The comparative analysis of these metrics reveals several key issues and lessons:

1. Work-Life Balance is Crucial: The data clearly shows that shorter working hours in the EU are associated with higher quality of life and happiness. This suggests that prioritising work-life balance can lead to more fulfilled and productive citizens. Policies that support flexible working hours, paid vacations, and robust social safety nets are critical in achieving this balance.
2. Healthcare and Social Safety Nets Matter: Comprehensive healthcare systems and social safety nets in the EU contribute significantly to higher quality of life and happiness. These systems reduce stress and provide security, allowing individuals to focus on personal growth and well-being. The US could benefit from adopting similar policies to improve its quality of life metrics.
3. Economic Growth Must Be Inclusive: While GDP growth is important, it does not measure, and must translate into improved, living conditions for all citizens. The EU’s higher quality of life and happiness indices suggest that their model of inclusive economic growth, which considers social and environmental factors, is more sustainable and beneficial in the long run.
4. Environmental Quality Impacts Well-Being: Stringent environmental policies in the EU lead to better air and water quality, directly contributing to higher quality of life and happiness. Addressing environmental issues should be a priority for policymakers aiming to improve overall well-being.
5. Social Cohesion and Trust in Institutions: Higher levels of social cohesion and trust in institutions in the EU correlate with higher happiness levels. Building trust and fostering social cohesion through transparent governance and community-building initiatives can enhance happiness and quality of life.

Implementing the Lessons

To implement these lessons, policymakers and business leaders must take a holistic approach. Here are some practical steps:

1. Adopt Flexible Work Policies: Encourage flexible working hours, remote work options, and ensure employees have adequate paid leave. This will help improve work-life balance and increase overall job satisfaction.
2. Invest in Healthcare and Social Safety Nets: Strengthen healthcare systems and social safety nets to provide security and reduce stress. This investment will pay off through a healthier, more productive workforce.
3. Promote Inclusive Growth: Ensure that economic policies are inclusive and benefit all segments of society. This includes investing in education, infrastructure, and social programs that support disadvantaged groups.
4. Enhance Environmental Policies: Implement stringent environmental regulations to improve air and water quality. This will not only protect the environment but also enhance the health and well-being of citizens.
5. Foster Social Cohesion and Trust: Promote transparent governance, fight corruption, and engage in community-building initiatives. Building trust and fostering social cohesion can significantly enhance happiness and quality of life.

The comparative analysis of the US and EU over the past decade provides valuable insights into the interplay between work, economic output, quality of life, and happiness. It highlights the importance of adopting a holistic approach that prioritises well-being alongside economic growth.

The EU’s model of shorter working hours, comprehensive healthcare, inclusive growth, stringent environmental policies, and strong social cohesion offers a blueprint for improving quality of life and happiness. While the US has made strides, there is still much to learn from the European experience.

Ultimately, the goal should be to create societies where economic growth translates into tangible improvements in the lives of all citizens. By prioritising work-life balance, healthcare, inclusivity, environmental quality, and social cohesion, we can build a future where everyone has the opportunity to lead a fulfilling and happy life.

References:

World Bank:

• World Bank. (n.d.). GDP (current US$) [Data set]. Retrieved from https://data.worldbank.org/indicator/NY.GDP.MKTP.CD

OECD:

• Organisation for Economic Co-operation and Development. (n.d.). Annual hours worked [Data set]. Retrieved from https://stats.oecd.org/Index.aspx?DataSetCode=ANHRS
• Organisation for Economic Co-operation and Development. (n.d.). Better Life Index [Data set]. Retrieved from http://www.oecdbetterlifeindex.org/

World Happiness Report:

• Helliwell, J. F., Layard, R., & Sachs, J. (Eds.). (n.d.). World Happiness Report 2023. Sustainable Development Solutions Network. Retrieved from https://worldhappiness.report/

Additional references on Simon Kuznets:

• Kuznets, S. (1934). National income, 1929–1932. 73rd US Congress, 2nd session, Senate document no. 124, 1934. Retrieved from https://fraser.stlouisfed.org/title/national-income-1929-1932-971
• Kuznets, S. (1962). How to Judge Quality. The New Republic, October 20, 1962.