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Canada doesn't deserve the silver

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It has been widely reported in the Globe and elsewhere that Canada ranks number 2 in the just-released OECD Better Life Index, outstripped only by Australia.

I am all for measures of objective and subjective social well-being that go beyond GDP as a measure of progress, and this OECD report offers up some useful information.

But providing grounds for national chest thumping is NOT the object of the OECD exercise.

Indeed, the Frequently Asked Questions part of the OECD media release on the Better Life index points this out quite explicitly.

"Which country is Number 1?

That's up to you! The OECD has not assigned rankings to countries. Instead, Your Better Life Index is designed to let you, the user, investigate how each of the 11 topics can contribute to well-being. If you think Housing is more important than Environment, for example, just change the ratings in Your Better Life Index toolbar and instantly see how countries compare. When you've created your own Index, click "Share this Index" to show it your friends and further the debate on what makes for a better life."

The report provides one to three indicators for each of 11 topics. Of these, Canada does well on some, and worse on others. We actually do very badly on two dimensions -- work and life balance, and civic engagement.

Moreover, this report looks only at averages, and not at the distribution of well-being within Canada or any other country.

"Does the Index take into account inequalities between people in a country?

No. At the moment Your Better Life Index only evaluates quality of life and living condition for an average individual or household, representative of the country where she is living."

One important thing we do know about Canada, however, is that we are more unequal than most OECD countries. According to the OECD's own set of social indicators Society at a Glance -- we rank a dismal 22nd of 34 countries in terms of after tax household income measured by the Gini, and 21st in terms of the incidence of poverty.

So, Canada may well rank high in terms of average income and wealth per person, but many other countries, notably the Scandinavian countries, would rank much higher than us if we bench-marked countries based on medians (mid-points in the distribution) rather than averages.

Similarly, average literacy in Canada is at the very high end of the spectrum, but we have a relatively high proportion of persons with very low literacy levels.

So, this is a useful exercise, badly reported.

This article was first posted on The Progressive Economics Forum.

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