OECD and Progress - Beyond GDP

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OECD and Progress Beyond GDP

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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

Transcript of OECD and Progress - Beyond GDP

Page 1: OECD and Progress - Beyond GDP

OECD and Progress

Beyond GDP

Page 2: OECD and Progress - Beyond GDP

GDP is an important economic indicator that measures output.

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BUT IT DOESN’T GIVE A FULL PICTURE OF SOCIAL PROGRESS AND WELL-BEING

But it is not sufficient to measure

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If GDP per capita rises, it means we’re all getting richer, right?

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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.

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Equally, GDP leaves out some good things …

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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.

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GDP includes how much we’re spending on things like education, the police and health…

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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?

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Bad things can be good for GDP:Natural disasters kill and maim millions …

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But all that cleaning up afterwards meansextra economic activity, which is good for GDP.

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GDP is a good economic measure …

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… but not so good for measuring progess, well-being or happiness.

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Relying on GDP alone would be like driving a car only looking at the speedometer…

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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.

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OECD WORK ONMEASURING PROGRESS

OECD has taken part in the Stiglitz-Sen-Fitoussi Commission on the Measurement of Economic Performance and Social Progress

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OECD produces many comparable indicators that can help assessing progress.

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GDP per capita

Take inequality.This map shows GDP per capita for countries in Western Europe.

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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 ….

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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/

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Differences in income can beeven more striking …

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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

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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

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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

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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

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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

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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.

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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

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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.

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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

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United KingdomFranceIreland

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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

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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

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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

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OECD also measures the outcome of health services.

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Source:OECD(2009), Health at a Glance, Chart 1.1.1. Data: http://dx.doi.org/10.1787/717383404708

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Life expectancy at birth in OECD countries

OECD average

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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…

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Life expectancy at birth in OECD countries

OECD average

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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…

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Life expectancy at birth in OECD countries

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Source:OECD(2009), Health at a Glance, chart 1.3.2. Data: http://dx.doi.org/10.1787/717458111254

1970 20060

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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.

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OECD can also compare outcomes of law-enforcement services.

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Japan

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Crime victimsPercentage of people who were victims of crime in the last

12 months

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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

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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.

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For instance, OECD and its sister agency IEA measure CO2 emissions

Source:IEA(2009), CO2 Emissions from Fuel Combustion

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Turkey

Poland

Greece

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United Kingd

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OECD

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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.

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Clearly, we can’t assess people’s quality of life just by looking at what the economy is producing (which is what GDP measures).

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We need to consider a much wider range of indicators, some objective (how long are people living?) and some subjective (do you feel happy?)

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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…

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While polling people on life satisfaction is a subjective indicator.

TurkeyItaly

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Life satisfactionon a 0-10 point scale, 2006

KoreaFrance

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SwedenOECD

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United KingdomCanada

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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

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We’ve made a good start on measuring progress …

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We’ve made a good start on measuring progress …but we still have a lot more to do.

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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

Page 47: OECD and Progress - Beyond GDP

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