More than two million people have died worldwide and the threat of variants and uneven policy decisions on how to respond has created uncertainty in what the future holds. But despite this, there is hope that the end game is in sight, as vaccine rollout steadily increases while many continue to adhere to mask mandates and physical distancing.

This year’s Happiness Report was faced with a unique challenge in trying to understand what effect the pandemic has had on subjective well-being and vice versa. Of all the factors usually supporting happiness, the most important for explaining COVID-19 death rates were people’s trust in each other, and confidence in their governments.

“We need urgently to learn from Covid-19,” said Jeffrey Sachs. “The pandemic reminds us of our global environmental threats, the urgent need to cooperate, and the difficulties of achieving cooperation in each country and globally. The World Happiness Report 2021 reminds us that we must aim for wellbeing rather than mere wealth, which will be fleeting indeed if we don’t do a much better job of addressing the challenges of sustainable development.”

Every year the World Happiness Report normally compiles data from the previous three years of surveys. We do this to increase the sample size and keep the confidence bounds smaller. Looking at each country from 2018-2020, we find these 10 are the happiest in the world (Figure 2.1):

1. Finland 🇫🇮
2. Denmark 🇩🇰
3. Switzerland 🇨🇭
4. Iceland 🇮🇸
5. Netherlands 🇳🇱
6. Norway 🇳🇴
7. Sweden 🇸🇪
8. Luxembourg 🇱🇺
9. New Zealand 🇳🇿
10. Austria 🇦🇹

This year, however, because of the pandemic, we thought it would be interesting to also report how countries fared in 2020 only. We note that the one year samples are small enough, and the top country scores are so close, that the differences between nearby countries are not statistically significant. Here are the top 10 (Table 2.1):

1. Finland 🇫🇮
2. Iceland 🇮🇸
3. Denmark 🇩🇰
4. Switzerland 🇨🇭
5. Netherlands 🇳🇱
6. Sweden 🇸🇪
7. Germany 🇩🇪
8. Norway 🇳🇴
9. New Zealand 🇳🇿
10. Austria 🇦🇹

(Note: Luxembourg was not surveyed in 2020 and is represented by its 2018-19 survey in the official rankings)

It comes as no surprise as Finland once again takes the top spot as the happiest country in the world according to survey data taken from the Gallup World Poll. It has always ranked very high on the measures of mutual trust that have helped to protect lives and livelihoods during the pandemic. The rankings overall remained very similar to last year.

“Surprisingly there was not, on average, a decline in well-being when measured by people's own evaluation of their lives,” said John Helliwell. “One possible explanation is that people see COVID-19 as a common, outside threat affecting everybody and that this has generated a greater sense of solidarity and fellow-feeling.”

The report looks to answer a key question: “Why the different COVID-19 death rates across the world?” Death rates were very much higher in the Americas and Europe than in East Asia, Australasia, and Africa.

"This has been a very challenging year, but the early data also show some notable signs of resilience in feelings of social connection and life evaluations." said Lara Aknin.

Factors helping to account for the variation between countries included: the age of the population; whether the country was an island; proximity to other highly infected countries. Cultural differences played a key role as well including: confidence in public institutions; knowledge from previous epidemics; income inequality; whether the head of government was a woman, and even whether lost wallets were likely to be returned.

“The East Asian experience shows that stringent government policies not only control Covid-19 effectively, but also buffer the negative impact of daily infections on people’s happiness,” said Shun Wang. “You can find this kind of expressions from the conclusion of our chapter and the summary in the chapter 1.”

Mental health has been one of the casualties both of the pandemic and of the resulting lockdowns. When the pandemic struck, there was a large and immediate decline in mental health in many countries around the world. Estimates vary depending on the measure used and the country in question, but the qualitative findings are remarkably similar. In the UK, in May 2020, a general measure of mental health was 7.7% lower than predicted in the absence of the pandemic, and the number of mental health problems reported was 47% higher.

“Living long is as important as living well. In terms of well-being-years per person born, the world has made great progress in recent decades which even COVID-19 has not fully offset,” said Richard Layard.

As one would expect with lockdowns and physical distancing, the pandemic had a significant effect on workforce well-being. Falling unemployed during the pandemic is associated with a 12% drop in life satisfaction. “Strikingly, we find that among people who stopped work due to furlough or redundancy, the impact on life satisfaction was 40% more severe for individuals that felt lonely to begin with,” said Jan-Emmanuel De Neve. “Our report also points towards a ‘hybrid’ future of work, that strikes a balance between office life and working from home to maintain social connections while ensuring flexibility for workers, both of which turn out to be key drivers of workplace well-being.”

A breakdown of the chapters of the World Happiness Report 2021:

* Chapter 1: Overview: Life under COVID-19
John F. Helliwell, Richard Layard, Jeffrey D. Sachs, Jan-Emmanuel De Neve, Lara B. Aknin, and Shun Wang

* Chapter 2: World Happiness, Trust and Deaths during COVID-19
John F. Helliwell, Haifang Huang, Shun Wang and Max Norton

* Chapter 3: COVID-19 Prevalence and Well-being: Lessons from East Asia
Mingming Ma, Shun Wang, and Fengyu Wu

* Chapter 4: Reasons for Asia-Pacific Success in suppressing COVID-19
Jeffrey D. Sachs

* Chapter 5: Mental health and the COVID-19 pandemic
James Banks, Daisy Fancourt, and Xiaowei Xu

* Chapter 6: Social Connections and Well-being during COVID-19
Karynna Okabe-Miyamoto and Sonja Lyubomirsky

* Chapter 7: Work and Well-being during COVID-19: Impact, Inequalities, Resilience, and the Future of Work
Maria Cotofan, Jan-Emmanuel De Neve, Marta Golin, Micah Kaats, and George Ward

* Chapter 8: Living long and living well: The WELLBY approach
Richard Layard and Ekaterina Oparina

The World Happiness Report is a publication of the Sustainable Development Solutions Network, powered by data from the Gallup World Poll. Including the World Risk Poll by Lloyd’s Register Foundation, and the life satisfaction data collected during 2020 as part of the Covid Data Hub. The Report is supported by the Ernesto Illy Foundation; illycaffè; Davines Group; The Blue Chip Foundation; The William, Jeff, and Jennifer Gross Family Foundation; the Happier Way Foundation, Indeed, and Unilever’s largest ice cream brand Wall’s.

The report is edited by Professor John F. Helliwell of the University of British Columbia; Professor Richard Layard, co-director of the Wellbeing Programme at LSE’s Centre for Economic Performance; University Professor Jeffrey Sachs, President of SDSN and the Earth Institute’s Center for Sustainable Development; Professor Jan-Emmanuel De Neve, Director of the Wellbeing Research Centre at the University of Oxford: Professor Lara B. Aknin of Simon Fraser University, and Professor Shun Wang of the Korea Development Institute.