Wellbeing in the Netherlands : the SCP life situation index since 1974

Abstract

Recently, there has been a lot of interest in achieving a broader perspective on prosperity and the development of countries. This study is about a composite index for describing and monitoring developments in the life situation of the Dutch population. Since 1974 this Life Situation Index (LSI) is used by the Netherlands Institute for Social Research/SCP to measure objective aspects of the individual life situation (realised wellbeing). In the study the (international) context and the choices made are described and discussed. The LSI is composed of indicators from eight life domains: housing, health, leisure activity, consumer durables, sport activity, vacation, social participation and mobility. The objective of the index is to be policy-relevant, describe the life situation as a whole, and to make progress or deterioration of the life situation visible. Trends must be visible not only for the Netherlands as a whole, but also for various social groups in Dutch soci ety. The description of the life situation is placed in a broader framework of background information. This framework, in which the individual life situation takes centre stage, also includes determinants of the life situation (including resources), the environment and the use of public services. In the broader framework we also look at subjective indicators and assume that peoples life situation affects their happiness and satisfaction. In the study, the most important choices and considerations underlying the current index are discussed. First, the choice of domains and indicators for the life situation. The selection of domains and indicators since the 1970s is based on the (prevailing) literature and on discussions within the OECD and the social indicators movement. The choice is also inspired by the policy relevance that the domains should have. In part, the choice is also based on face validity. In this study the choice of domains has been calibrated to internationally available indices and monitoring systems and to what people themselves regard as important. Second, discussed is the reason why an index is constructed and how this is done. Combining indicators into a composite index offers added value above the use of loose indicators because an index is helpful in terms of communication, makes accumulation effects visible, makes complex concepts more understandable, and makes it easier to compare groups with each other. To combine the indicators of LSI, non linear canonical correlation analysis is used. Furthermore, some stability and sensitivity analyses are presented. The stability analyses conducted in this study show that the weights are rather stable through the years as well as for different social groups. However, using or not using weights does not have much impact on the results. The main advantage of using weights are: the determination of the correct sequence for nominal indicators, the extent of difference within that sequence, and the insight t hey give into any diminishing returns (more participation is not always better). Over the past 30 years the life situation of the Dutch population has improved. This improvement has occurred among all social groups, but not for all groups to the same extent. Besides: people with a good life situation are happier and more satisfied than people with a bad life situation.