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GDP includes how much we’re spending on things like education, the police and health… But it isn’t designed to measure the outcomes of all that spending – are our kids getting smarter, our streets safer, our hospitals more effective? OECD produces many comparable indicators that can help assess progress. Visit: www.oecd.org/statistics
OECD and Progress
Beyond GDP
GDP is an important economic indicator that measures output.
BUT IT DOESN’T GIVE A FULL PICTURE OF SOCIAL PROGRESS AND WELL-BEING
But it is not sufficient to measure
If GDP per capita rises, it means we’re all getting richer, right?
Wrong. GDP per capita is just GDP divided by the size of the population. It doesn’t tell us what people are actually earning or if that’s rising.
Equally, GDP leaves out some good things …
Raising children, cooking dinner or tidying up may or may not be counted in GDP depending on whether they’re done in the home, by the state or by a firm.
GDP includes how much we’re spending on things like education, the police and health…
But it isn’t designed to measure the outcomes of all that spending – are our kids getting smarter, our streets safer, our hospitals more effective?
Bad things can be good for GDP:Natural disasters kill and maim millions …
But all that cleaning up afterwards meansextra economic activity, which is good for GDP.
GDP is a good economic measure …
… but not so good for measuring progess, well-being or happiness.
Relying on GDP alone would be like driving a car only looking at the speedometer…
Relying on GDP alone would be like driving a car only looking at the speedometer…
But other indicators are necesary to assess the success of a policy.
OECD WORK ONMEASURING PROGRESS
OECD has taken part in the Stiglitz-Sen-Fitoussi Commission on the Measurement of Economic Performance and Social Progress
OECD produces many comparable indicators that can help assessing progress.
GDP per capita
Take inequality.This map shows GDP per capita for countries in Western Europe.
GDP per capita
Take inequality.This map shows GDP per capita for countries in Western Europe.
But when we break down those countries by region ….
Other patterns emerge: Differences within countries can be bigger than those between countries
Source:OECD Regional eXplorer http://stats.oecd.org/OECDregionalstatistics/ and OECD Factbook, http://stats.oecd.org/oecdfactbook/
Differences in income can beeven more striking …
Source:OECD(2008), Growing Unequal, chart 1.6 Data: http://dx.doi.org/10.1787/420721018310
Mexico Italy Spain OECD Japan France Germany United Kingdom
Canada United States Luxembourg0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000Income distribution in OECD countries (mid-2000)
Average income of the richest decile (richest 10% of the population)
Average income of the poorest decile (poorest 10% of the population)
Median income of the population (50% earn less than this value)
Average income of the 3rd richest decile
Average income of the 3rd poorest decile
Source:OECD(2008), Growing Unequal, chart 1.6 Data: http://dx.doi.org/10.1787/420721018310
Mexico Italy Spain OECD Japan France Germany United Kingdom
Canada United States Luxembourg0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000Income distribution in OECD countries (mid-2000)
Average income of the richest decile (richest 10% of the population)
Average income of the poorest decile (poorest 10% of the population)
Median income of the population (50% earn less than this value)
Average income of the 3rd richest decile
Average income of the 3rd poorest decile
Again, differences across countries are lesser
Source:OECD(2008), Growing Unequal, chart 1.6 Data: http://dx.doi.org/10.1787/420721018310
Mexico Italy Spain OECD Japan France Germany United Kingdom
Canada United States Luxembourg0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000Income distribution in OECD countries (mid-2000)
Average income of the richest decile (richest 10% of the population)
Average income of the poorest decile (poorest 10% of the population)
Median income of the population (50% earn less than this value)
Average income of the 3rd richest decile
Average income of the 3rd poorest decile
Again, differences across countries are lesser than differences within a country.
1985 1990 1995 2000 20050.9
1.0
1.1
1.2
Disposable income inequality of 15 OECD countriesGini coefficients, mid-1980s = 1
In most OECD countries, income inequality is rising…
Source:OECD(2008), Growing Unequal, chart 1.5 Data: http://dx.doi.org/10.1787/420718178732
OECD has an extensive range of indicators, such as PISA, that measure education outcomes…
things like how well students are doing, and whether they’re being held back by poverty.
MexicoTurkeyGreece
PortugalItaly
LuxembourgNorway
SpainSlovak Republic
United StatesIceland
OECD totalFrance
DenmarkPoland
SwedenHungary
IrelandBelgium
AustriaSwitzerland
Czech RepublicUnited Kingdom
GermanyKorea
NetherlandsAustralia
New ZealandJapan
CanadaFinland
400 450 500 550 600Science
MexicoTurkeyGreece
SpainSlovak Republic
ItalyPortugal
LuxembourgHungary
Czech RepublicOECD total
NorwayIcelandFranceAustria
DenmarkGermany
United KingdomJapan
SwitzerlandBelgium
NetherlandsSwedenPoland
AustraliaIreland
New ZealandCanadaFinland
Korea400 450 500 550 600Reading
MexicoTurkeyGreece
ItalyPortugal
United StatesSpain
OECD totalNorway
LuxembourgHungary
Slovak RepublicPoland
United KingdomFranceIreland
SwedenGermany
AustriaIceland
Czech RepublicDenmarkAustraliaBelgium
New ZealandJapan
CanadaSwitzerlandNetherlands
KoreaFinland
400 450 500 550 600Mathematics
Equally, students in some countries do much better in the OECD’s PISA tests.
Source:OECD(2009), Society at a Glance, chart SS.4.1. Data: http://dx.doi.org/10.1787/550180640382
Turke
y
Greece
German
y
Austria
Czech Rep
ublic
Switz
erlan
d
HungarySp
ain
Portuga
l
Slova
k Rep
ublic
United St
ates
OECD avera
geJap
an
United Kingd
omIre
landIta
ly
Swed
en
Norway
Netherl
ands
Denmark
Poland
Finlan
d
New Zeala
nd
Australi
a
Icelan
d0
10
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70
Tertiary graduation ratesPercentage of tertiary-type A graduates to the population at the typical age
of graduation
Source:OECD(2009), OECD Factbook Data: http://dx.doi.org/10.1787/537572781005
Some countries have much higher percentages of young people graduating from university-type education
Turke
y
Greece
German
y
Austria
Czech Rep
ublic
Switz
erlan
d
HungarySp
ain
Portuga
l
Slova
k Rep
ublic
United St
ates
OECD avera
geJap
an
United Kingd
omIre
landIta
ly
Swed
en
Norway
Netherl
ands
Denmark
Poland
Finlan
d
New Zeala
nd
Australi
a
Icelan
d0
10
20
30
40
50
60
70
Tertiary graduation ratesPercentage of tertiary-type A graduates to the population at the typical age
of graduation
Source:OECD(2009), OECD Factbook Data: http://dx.doi.org/10.1787/537572781005
Some countries have much higher percentages of young people graduating from university-type education
OECD also measures the outcome of health services.
Source:OECD(2009), Health at a Glance, Chart 1.1.1. Data: http://dx.doi.org/10.1787/717383404708
19601962
19641966
19681970
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19801982
19841986
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20002002
20042006
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Life expectancy at birth in OECD countries
OECD average
Source:OECD(2009), Health at a Glance, Chart 1.1.1. Data: http://dx.doi.org/10.1787/717383404708
Life expectancy has increased by 10 years since 1960…
19601962
19641966
19681970
19721974
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19801982
19841986
19881990
19921994
19961998
20002002
20042006
45
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Life expectancy at birth in OECD countries
OECD average
Source:OECD(2009), Health at a Glance, Chart 1.1.1. Data: http://dx.doi.org/10.1787/717383404708
The gap between countries is a third of what it was
Life expectancy has increased by 10 years since 1960…
19601962
19641966
19681970
19721974
19761978
19801982
19841986
19881990
19921994
19961998
20002002
20042006
45
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Life expectancy at birth in OECD countries
Source:OECD(2009), Health at a Glance, chart 1.3.2. Data: http://dx.doi.org/10.1787/717458111254
1970 20060
5000
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Premature mortalityPotential years of life lost per 100 000 population
Mexico
Portugal
Sweden
United States
OECD
Potential years of life lost is the amount of time that people who die before 70 would have lived if they had not died prematurely. Premature mortality has halved in OECD since 1970.
OECD can also compare outcomes of law-enforcement services.
Spain
Japan
Hungary
Portuga
l
Austria
France
Greece
Italy
Finlan
d
Luxem
bourg
German
y
PolandOEC
D
Norway
Swed
en
Australi
a
Canada
United St
ates
Belgium
Switz
erlan
d
Mexico
Denmark
Netherla
nds
United Kingd
omIce
land
New Ze
aland
Ireland
0
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Crime victimsPercentage of people who were victims of crime in the last
12 months
Icelan
d
Finlan
d
Norway
Canada
Denmark
Netherl
ands
Austria
Sweden
United Stat
es
France
OECD
Belgium
Hungary
Australi
a
Irelan
d
German
y
New Ze
aland
United Kingd
omPoland
Spain
Mexico
Portuga
lIta
lyJap
an
Luxem
bourg
Greece
0
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Fear of crimePercentage of people feeling unsafe in the streets after dark
Source:OECD(2009), Society at a Glance, Table CO.3.2. Data: http://dx.doi.org/10.1787/550717741440
Environment dashboard
OECD statistics examine not only environmental capital –clean water, forests, animal species and so on …
but also the factors that are threatening them – greenhouse gas emissions, pollution, urbanisation.
For instance, OECD and its sister agency IEA measure CO2 emissions
Source:IEA(2009), CO2 Emissions from Fuel Combustion
Australi
a
Irelan
dKorea
Turkey
Poland
Greece
Finlan
d
United Kingd
om
Norway
OECD
Canada
Sweden
Slova
k Rep
ublic
Denmark
Belgium
United St
ates
Netherl
ands
France
Japan
Hungary
Mexico
Italy
Spain
Luxe
mbourg
Austria
Portuga
l
German
y
Icelan
d
Czech Rep
ublic0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Threatened species by countryAs a percentage of species known in that country
But also resources, such as threatened species
Source:OECD(2008), OECD Environmental Data Compendium, table 1.A.
Clearly, we can’t assess people’s quality of life just by looking at what the economy is producing (which is what GDP measures).
We need to consider a much wider range of indicators, some objective (how long are people living?) and some subjective (do you feel happy?)
Mexico
Japan
Australia
Turke
yKorea
Canad
a
United St
ates
Poland
OECD
New Ze
aland
Swed
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United Kingd
omFra
nce Italy
Spain
Finlan
d
Norway
German
y
Belgium
0
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Personal and leisure time by countryHours per day
Personal care Leisure
Source:OECD(2009), Society at a Glance, chart 2.3 Data: http://dx.doi.org/10.1787/548528164155
Measuring leisure time is an example of an objective measure of well-being…
While polling people on life satisfaction is a subjective indicator.
TurkeyItaly
Slovak RepublicHungary
Portugal
KoreaPoland
IrelandGreece
Czech RepublicJapan
GermanyOECD
Mexico
LuxembourgIceland
United KingdomFrance
Austria
Spain
United StatesSweden
BelgiumCanada
Australia
New Zealand
Switzerland
Norway
NetherlandsFinland
Denmark0123456789
10
Life satisfactionon a 0-10 point scale, 2006
KoreaFrance
Japan
Czech RepublicHungary
Portugal
SpainBelgium
SwedenOECD
Australia
New Zealand
United KingdomCanada
United StatesNorway
Denmark
GermanyFinland
Ireland
Switzerland
Mexico0
102030405060708090
100
Work satisfactionPercentage of all employees completely, very or fairly satisfied with their job,
2005
Source:OECD(2009), Society at a Glance, chart CO.1.1 and CO.2.1. Data: http://dx.doi.org/10.1787/550664800231 Data: http://dx.doi.org/10.1787/550708264007
We’ve made a good start on measuring progress …
We’ve made a good start on measuring progress …but we still have a lot more to do.
For further information:
Health at a Glance 2009
OECD Factbook 2009 Society at a Glance 2009
OECD Environmental OutlookSustainable Development
Growing Unequal? OECD iLibrary, - all OECD publications
Doing Better for Children
www.oecdilibrary.org
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