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ensuring this long and happy life does not cause great environmental pressures. The so-called developed world has no business at the top of the HPI, primarily, because of their large ecological footprint. The NEF’s understanding is that the environmental price of well-being, in these states, is very high. Estonia’s position in the HPI ranking is also nothing to brag about – among the reference states, we place last. The Happy Planet Index clearly provides an alternative view of well-being. On the one hand, it combines the objective statistical data on people’s self-assessments (by the way, the HPI’s subjective well-being indicators are from the Gallup World Poll), while on the other hand, it includes the “environmental price” dimension of well-being. The discomfort caused by this view is probably why the HPI has not achieved a dominant position in the assessment of international development. The photographers of the subjective world have been joined recently by many exotic approaches – for example, an attempt to determine the proportion of flourishing people in the population, and to point out the “building blocks” of subjective well-being. Renowned psychologist Martin Seligman is convinced that people start to “flourish” when all of our lives have sufficient positive emotions, engagement and meaningfulness, when interpersonal relations have a positive undertone, and everyone has the opportunity for self-realisation (Seligman 2011, 16). Since this is a very subjective and ambiguous construction, the various forms of “flourishing” have not yet become rooted in broader international comparisons of development. Figure 3.3.2 Assessment of life now, five years ago and five years hence, in Estonia, and the reference countries. 5 years ago Now 5 years hence Assesment Denmark Netherlands Switzerland Austria Finland Canada Israel Costa Rica New Zealand Ireland Uruguay Chile Singapore Czech Republic Taiwan Slovenia South Korea Slovakia Estonia Hungary Assesment 0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8 Source: Gallup World Poll 2012, average assessment on a 10-step ladder of good life 3.3.2 Changes in the sense of well-being Besides the assessments of today’s situation, the dynamics of the sense of well-being are also important – do people feel that their lives are improving or worsening? The Gallup World Poll tries to identify the direction of these trends, by asking the respondents for an assessment of today’s situation, as well as their imagined location on the good-bad ladder of life, five years ago, and five years hence – see Figure 3.3.2. In most states (including Estonia), people hope that their lives will improve in the future, although some are more diffident (e.g. Slovenians and Czechs, or the residents of Taiwan). The Eurofound analysis also includes a future dimension -- the respondents are asked how optimistic they about their future. (They are asked to respond to the statement “I am optimistic about the future” by selecting one of the possible answers: Strongly disagree, Disagree, Neither agree nor disagree, Agree, Strongly agree). In Estonian, slightly more than 60% of the people view their future optimistically, which puts us in a significantly better position in this international comparison, than in the comparison based on life satisfaction. (Figure 3.3.3) The distinctiveness of Estonia’s position can be explained by the fact that, in many EU states, people are satisfied with the situation today, but their expectations for the future are more pessimistic. The Eurofound researchers find that the rate of optimism is related primarily to people’s assessment of whether the state is on the right path of development, and less on the ability to cope personally (Eurofound, 2012, 31). Estonia’s population seems to confirm this connection – both our trust in the state authority (see sub-chapter 2.7), and our rate of optimism, are considerably above the EU average. An optimistic attitude toward life is an important motivating force for forging ahead in life, and for establishing ambitious goals. Thus, Estonia’s good position on the optimism scale could, generally, be an encouraging 126 Estonian Human Development Report 2012/2013
sign. It seems that the usual view of Estonia’s population, as being comprised of depressed pessimist, is not justified now. 3.3.3 Factors affecting subjective well-being What does subjective well-being depend on? The material situation and people’s wealth are definitely important factors. Generally, people in wealthier societies are more satisfied with their lives than those in poorer countries (see also sub-chapter 3.1.1). However, the connection between wealth and well-being is not linear, nor is it absolute, and researchers allude to the many particularities of this connection. Firstly, the impact of wealth depends on the context. Internally, the connection between income and subjective well-being is usually weaker than internationally. Diener’s analyses show that the correlation between income, and subjective well-being internally, by state, usually, is in the range of 0.15 – 0.20, whereas in international comparisons, the connection is significantly stronger (the average of various studies is ca. 0.60). Diener provides the following explanation for this: in the wealthier states, besides the differences in income levels, many other important factors (that are not dependent on income level) affecting satisfaction have developed, such as honouring human rights, equitable treatment, and a better level of education. (Diener, Biswas-Diener 2002, 132). Secondly, wealth impacts subjective well-being more strongly among the poorer classes of society, and in poorer states. There is less impact in the wealthier ones. It turns out that the higher-income people in wealthy states are only somewhat happier than their poorer compatriots. According to Diener, „for middle and upper-income people in economically developed nations, acquiring more income is not likely to strongly enhance subjective well-being“. (Diener, Biswas-Diener, 2002, 149). Thirdly, subjective well-being is not shaped so much by the absolute income level, but rather, by the relative level. What is important is my material situation, in comparison to those close to me, to my acquaintances and to other members of the society (Easterlin 2003). An important basis for comparison also seems to be people’s “personal histories” – their previous level of well-being. If the trend is downward, it also significantly lowers subjective well-being. Although the absolute value of the Italians’ and Greeks’ incomes is significantly higher than the Estonians’, their subjective well-being indicators are rapidly moving downward (and are lower than the Estonians’ indicators today), thanks to comparisons with “how things were before.” Wealth is not the only determinant of subjective well-being. In the Gallup ranking, Mexicans rate their lives better than Germans, although economic logic would assume the opposite. Research data points to the fact that the wealthier a society becomes, the more important the “non-material” factors affecting well-being become. These include health, work, and family life (Easterlin 2003), but also people’s involvement in social life, and interpersonal Figure 3.3.3 Optimism about the future. Stronly agree Agree Neither agree no disagree Disagree Percentage Greece Slovakia Portugal Italy France Hungary Cyprus Czech Republic Slovenia Belgium Bulgaria EL-27 Romania Latvia Great Britain Spain Malta Luxembourg Lithuania Austria Poland Estonia Germany Netherlands Ireland Finland Denmark Sweden Percentage Strongly disagree Source: Eurofound, 2012, 31 0 10 20 30 40 50 60 70 80 90 0 10 20 30 40 50 60 70 80 90 trust (Helliwell, Putnam 2004, 1444). Education level is also a determining factor – in practically all the states, people with higher educations are happier, and more satisfied with life than those who are less educated (Education at Glance 2011, 192). Therefore, wealth is an important factor influencing subjective well-being. However it is a principal force, primarily, in the societies that are at a “lower development phase”, i.e. at a time when most people are worried about satisfying their elementary needs – about making ends meet. For those who have made it out of the poverty zone (including the majority of Estonian people), the quality of life in the broader sense has a greater impact on subjective well-being. Estonian Human Development Report 2012/2013 127
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ESTONIAN HUMAN DEVELOPMENT REPORT 2
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Table of Contents 1 Human Capital /
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Dear Reader Since the moment when E
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1Human Capital Estonian Human Devel
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the HDI’s content has also been h
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Figure 1.1.1 The human development
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Figure 1.1.7 The income sub-index:
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The results of the Princeton Projec
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the hypothetical generation. The to
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Figure 1.2.3 Life expectancy. Eston
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Table 1.2.2 also presents the most
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The new trends that are appearing i
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Figure 1.2.8 Components of populati
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New features were introduced into E
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Initiation of Voluntary Birth Contr
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Table 1.3.1 Best-known educational
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(OECD 2012b). Therefore a certain r
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The reciprocal dependence of the pr
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Figure 1.3.8 Percentage of students
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Table 1.3.4 The quality of educatio
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1.4 Health Raul-Allan Kiivet Change
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Table 1.4.1 Usage of prescription m
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allude to the fact that approximate
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promote healthy lifestyles among th
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Figure 1.5.1 The World Values Surve
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Table 1.5.2 Estonia’s participati
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Figure 1.5.3 The percentage of the
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Figure 1.5.5 Percentage of the Esto
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The fact that Estonia’s position
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Summary Mati Heidmets The global vi
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2People and Society Estonian Human
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Table 2.1.1 Structure of the Bertel
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tioning market economies (15 states
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2.2 Freedom and democracy Martin M
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Table 2.2.1 Democracy indicators Po
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Figure 2.2.2 The distribution of th
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would be something that none of the
Page 77 and 78: political participation are general
Page 79 and 80: strongest, while a very small perce
Page 81 and 82: is concerned, Estonia is one of the
Page 83 and 84: Figure 2.4.2 Average circulation of
Page 85 and 86: 2.5 Corruption Jüri Saar In accord
Page 87 and 88: Lithuania, 61%; and in Russia, 69%.
Page 89 and 90: 2.6.2 Intentional homicides in Esto
Page 91 and 92: crime. And thirdly, there was a wis
Page 93 and 94: References 1. Ahven, A. & Tabur, L.
Page 95 and 96: states included in the EU Kids Onli
Page 97 and 98: 2.8 Public assessments of the state
Page 99 and 100: Figure 2.8.4 Changes releated to tr
Page 101 and 102: of the state’s development are en
Page 103 and 104: Table 2.9.1 The positions of Estoni
Page 105 and 106: 3. IEP (2011). Structures of Peace.
Page 107 and 108: 3Welfare and the Quality of Life Es
Page 109 and 110: choices made, not what people say t
Page 111 and 112: Figure 3.1.5 Public social spending
Page 113 and 114: tion agreed upon the social contrac
Page 115 and 116: References 1. Aidukaite, J. (2006).
Page 117 and 118: hand, to the “inequality of acces
Page 119 and 120: and explanations of the extent of i
Page 121 and 122: 5- much more than I deserve. Some d
Page 123 and 124: people in Estonia consider the inco
Page 125 and 126: Table 3.3.1 Experienced Well-Being
Page 127: at about 70%. In Latvia and Lithuan
Page 131 and 132: 3.4 Quality of life Anu Toots 3.4.1
Page 133 and 134: a uniform composite indicator has n
Page 135 and 136: 3.4.6 The components of life qualit
Page 137 and 138: Figure 3.4.4c Perceived quality of
Page 139 and 140: Figure 3.4.5 Changes in the depriva
Page 141 and 142: 3.5 Environment dimension of well-b
Page 143 and 144: Figure 3.5.1.b Estonia’s position
Page 145 and 146: 3.5.4 Energy intensity The energy i
Page 147 and 148: productivity, which is defined as t
Page 149 and 150: perceive themselves as worse off th
Page 151 and 152: 4The Economy Estonian Human Develop
Page 153 and 154: vide a valuable connection for maki
Page 155 and 156: Figure 4.1.3 Components of economic
Page 157 and 158: ule of law, the sub-indicators for
Page 159 and 160: References 1. Acemoglu, D.; Robinso
Page 161 and 162: Development Report employs generali
Page 163 and 164: and pasture land, and this was capi
Page 165 and 166: Basing the total and net savings re
Page 167 and 168: 4.3 Labour market Reelika Leetmaa,
Page 169 and 170: The problems include the very limit
Page 171 and 172: • Expenditures for active labour
Page 173 and 174: who lose their jobs. These ensure i
Page 175 and 176: 4.4 Productivity and the economic s
Page 177 and 178: labour costs at the company level r
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Table 4.4.4 Comparison of the produ
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Figure 4.4.1 Annual average increas
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4.5 Innovation Erik Terk, Katrin M
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Table 4.5.2 Comparison of innovatio
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Table 4.5.4 Comparison of the indic
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in order to make the R&D potential
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It is characteristic of the South K
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mechanisms for increasing their sta
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Globalisation and Policy Patterns 5
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When Estonia regained its independe
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5.2 The impacts of globalisation an
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Table 5.2.2 Support of the differen
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5.3 Development policies Erik Terk,
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• C -the “Estonia-centred” su
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Figure 5.4.1 Support for the possib
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Summary Erik Terk Estonia is part o
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ehavioural patterns. Therefore, it
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EDR 2012/2013 authors Clemens Buche
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EDR 2012/2013 authors Alari Purju i
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Editor-in-Chief: Mati Heidmets Prod
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