DEVELOPMENT

3Welfare and
the Quality of Life
Estonian Human Development Report 2012/2013
Introduction
Anu Toots
This chapter is dedicated to one of the most important
goals of the economic and social development of society –
the analysis of people’s welfare and quality of life.
The concept of welfare is multifaceted, and the
fundamental meaning and measurement techniques vary
according to the time period, as well as the disciplinary
background and normative viewpoint of the researchers.
The history of measuring welfare starts in the middle
of the 20 th century, when the welfare states of Western
Europe were fully developed. The obligation of welfare
states to help their populations cope with the competitive
environment related to market economies entailed
a system for comparing states by the size of the expenditures
made for social policies, as a percentage of GDP.
The analytical logic of the 1970s, i.e. the golden age of
welfare states, was simple – the larger the percentage of
GDP devoted to social costs, the better people’s welfare
needs can be assured.
In the last decade of the 20 th century, this way of
thinking was subjected to increasing criticism. Firstly, it
became clear that the changed economic structure and
ageing populations do not enable the redistribution principles
of the welfare states to be continued; and thus, sustainability
and social interests increased in importance.
Secondly, the measurement of social costs at the macro
level of society (as a percentage of GDP) made it impossible
to make an assessment of how individual people, or
various social groups, are able to cope. Thus, the voices
of those researchers who demanded that one must look
beyond GDP, and consider other parameters, besides
material ones, when measuring welfare, became louder.
Thus, today’s indices of welfare and quality of life are
complicated, and combine traditional indicators of economic
wealth with social statistics, like those related to
housing and the environment, to employment parameters
and to civic engagement. The larger well-being indices,
like the OECD’s Better Life Index and the EU Quality of
Life Index, also encompass the people’s subjective assessment
of their satisfaction with their lives and its quality.
Since its re-independence, Estonia has proceeded
from the concept of market fundamentalism, according to
which, welfare is limited by the performance of the markets
and economy. At times, the public has regarded this
orientation critically, and at other times, optimistically, but
on the whole, always loyally. This has resulted in some of
the lowest public sector social expenditures in the European
Union, and the solution of many social problems
(primarily housing, but also healthcare, and care giving)
by private means. The assessment of Estonia’s situation is
complicated by the fact that the Nordic countries, with
the world’s highest quality of life, as well as the post-Communist
states of Eastern Europe, with the lowest quality
of life in Europe, are both located in our vicinity. This
creates a certain equivocation in Estonia, and among the
people of Estonia, about how to define an adequate quality
of life. We lag far behind some of the countries, and are
far ahead of others. In this sense, Estonia’s situation could
be compared to a cross-country skier who is left alone on
the trail. He does not have to fear those who are coming
from behind, but catching up to the leaders, seems to be
unrealistic. Maintaining the correct tempo can be difficult,
for both the athlete and the state. This chapter analyses
how Estonia, with its contradictory welfare state structure
and attitudes towards it, is positioned in the international
rankings of well-being and the quality of life.
The presentation logic of the chapter moves from
the macro level to the micro level (from the society to the
individual), and from the classic approach to new methods.
The first sub-chapter examines the capability of all
the states to ensure well-being based on the traditional
perspective of economic wealth. The second sub-chapter
analyses the distribution of wealth in the society and its
impact on the equality and inequality of various groups.
The third part provides an international comparison of
subjective well-being and happiness, which is an approach
typical of psychologists. The fourth sub-chapter focuses
on measuring the quality of the new approaches to the
quality of life, which integrates all the aforementioned
aspects. And the fifth part forms a bridge to the next chapter,
which is devoted to the economy, by demonstrating
how people’s lifestyles and economic activities impact the
welfare and quality of life in the society.
Estonian Human Development Report 2012/2013
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