By Yoo Gyeong-joon
For decades, gross domestic product (GDP) has been the most influential measure of a nation’s development across the globe. Naturally, every new administration in Korea has made the same promise of advancing Korea into the league of developed nations through the increase of the nation’s GDP. However, the notion that “economic growth will bring about improvement in quality of life” has faced severe challenges ever since the turn of the new century. Economic crises and sustained low growth make it very difficult to achieve such a high level of GDP growth as was possible in the past. Also, the limitations inherent in GDP have become more apparent in recent years as it is unable to account for the issues in income distribution and environmental degradation. The increase of GDP can no longer be viewed as an improvement in the quality of life.
Easterlin’s Paradox is a well known hypothesis introduced by the American economist, Richard Easterlin. According to this hypothesis, the growth of income beyond the point where it sufficiently satisfies people’s basic needs does not increase happiness. In the new millennia, this concept was widely accepted, particularly among European nations, the United Nations and the Organization for Economic Cooperation and Development (OECD), and this gave rise to the emergence of the new agenda of “beyond GDP.”
Resonating the surge of social interest in “quality of life,” the pivot of national statistics is swiftly shifting from the existing quantitative measurement of GDP, into a more qualitative measurement of “well-being.” This was timed with the introduction by international organizations of numerous indicators designed to measure happiness and quality of life. In most of these indicators, Korea ranked significantly lower than it did in other traditional economic measurements. For instance, Korea ranked 28th out of the 38 countries according to the “Better Life Indicator” of the OECD in 2016. The World Happiness Report of the UN that measures subjective wellbeing ranked Korea 56th out of the 155 countries during the period between 2014 and 2016, placing Korea behind Taiwan, Japan, and Thailand.
The purpose of these indicators was to allow for international comparability at a certain time. Since they did not intend to reflect the unique circumstances of nations, an in-depth understanding of realities and trends could not be determined from these indicators. Therefore, since 2014, Statistics Korea has been providing the “National Quality of Life Indicators” which comprises 80 indicators across the 12 areas that are of importance to the quality of life in Korea. More recently in March of this year, the “Composite Index on the Quality of Life in Korea” was first released at an international conference co-organized by Statistics Korea and the Korean Society of Quality-of-life Studies. The data revealed that GDP has grown by 28.6 percent since 2006, while the quality of life indicator has grown by only 11.8 percent. Also, special attention was paid to the areas of family, community, employment, income, housing, and health since their scores were below the average.
Clearly, it is the call of our time that today’s national statistics offices have to produce statistical data relevant to the improvement of national quality of life and to reflect the realities and changes in quality of life. Yet this is only the first step. It requires a paradigm shift in national governance, whereby the happiness of the people defines the goals of national policies, and the improved quality of life for vulnerable groups comes before other national operational tasks so that the sum of the endeavors made by national statistical offices generates fruitful outcomes.
Yoo Gyeong-joon is Commissioner of the Statistics Korea.