PIBien-être Report 2023

The real income and employment indicators have evolved positively[1] thanks to employment dynamics and an increase in median purchasing power. Likewise, environmental aspects have improved, with a reduction in the share of the population exposed to fine particles and CO2 emissions. However, in 2022, the war against Ukraine has led to a significant increase in consumer prices and interest rates. The physical security indicator has also deteriorated due to the increase in the number of reported crimes. In 2022, overall the “Luxembourg Index of Well-being”, summarizing the dashboard of well-being indicators, has deteriorated compared to 2021 and is rather stable compared to 2010. Real economic growth (per capita) has also stagnated over the past twelve years. This fourth “GIPWell-being” report also includes a chapter on “happy years of life”, well-being at work, health, as well as citizens’ feeling of security. The report also questions the follow-up to be given to the PIBien-être project.

Housing crisis undermines well-being...

After a remarkable rebound from the pandemic in 2021, housing takes a nosedive in 2022: households that have taken out mortgages, particularly those with variable rates, have seen a sharp rise in repayments, leading to a higher debt ratio. The energy crisis is leading to an additional increase in the cost of electricity and heating, despite government subsidies. As a result, the rate at which households have to finance their housing has risen sharply. Between 2017 and 2022, the proportion of households' disposable income spent on housing will have risen from 19.7% to 30.2%, putting a heavy burden on their living expenses. The income indicators, with the exception of the median standard of living, remain below their 2010 performance. The proportion of people at risk of poverty has risen steadily since 2010, and income inequality has increased.

...while pollution indicators are sending out positive signals

In contrast, environmental indicators are showing strong improvement. The environmental situation is clearly more favourable in 2022, with a significant drop in greenhouse gas emissions and exposure to fine particles. This result is all the more remarkable given that economic activity and road traffic have returned to their pre-pandemic levels. In the longer term, the environmental index shows an improvement in environmental conditions in Luxembourg.
Another area that is following a favourable trend, albeit to a lesser extent, is education and skills. This is reflected in particular in the growing proportion of the adult population with a higher education qualification and in participation in continuing adult education.

GRAPH 1: DETERIORATION IN LIW, HOUSING AND PHYSICAL SAFETY INDICATORS AND IMPROVEMENT IN ENVIRONMENT AND EDUCATION INDICATORS

Source: STATEC

Young people more anxious and less satisfied with their lives  

Since 2021, STATEC has regularly asked residents to rate their satisfaction with their current life, their current happiness, their feelings of loneliness and anxiety, by asking them to give a score out of 10. In October 2023, residents gave an average score of 6.7 to satisfaction with their current life and 6.4 to their current happiness. Although feelings of loneliness have also fallen significantly, feelings of anxiety have tended to increase since January 2022, fuelled in particular by rising prices and soaring interest rates for property loans. A generational divide is emerging in terms of satisfaction and anxiety: younger people are generally more anxious and less satisfied, while older people are less anxious and more satisfied with their lives. What's more, we also note that the feeling of anxiety decreases as the level of income increases.

The vast majority of working people are happy with their jobs, except for employees just above the SSM

86% are satisfied with their job. Seven out of ten employees feel they are paid adequately. The adequacy of pay increases with salary, except for those just above SSM. The feeling of being paid fairly increases job satisfaction.

Obesity increases unhappiness

One adult in six is affected by obesity according to the self-reported Body Mass Index (BMI). Some population groups are more affected than others, particularly older, less educated and financially disadvantaged people. In addition to the repercussions on physical health, obesity increases the risk of unhappiness, particularly among women.

[1] However, since the second half of 2023, there has been a deterioration in the labour market, with a rise in the unemployment rate and an increase in business bankruptcies, indicating the end of the economic upturn.