STATEC report flags declining well-being in Luxembourg

Coincidentally, on the same day as an international report hailed Luxembourg as one of the Top 10 happiest countries in the world, the Grand Duchy's own National Institute of Statistics and Economic Studies (STATEC) reported a notable dip in the well-being index.

Introduced in 2017, this index aims to offer a comprehensive assessment of societal progress and residents' overall satisfaction, transcending traditional economic metrics like GDP per capita.

Positive trends are observed in income and employment metrics, bolstered by a resilient job market and post-Covid economic recovery. Environmental indicators also show promise, with reductions in air pollution and CO2 emissions indicating progress in environmental stewardship, despite economic and traffic activity returning to pre-pandemic levels.

Money can't buy happiness

But economic prosperity does not translate into greater well-being for the population. The fallout from Russia's invasion of Ukraine in 2022 sent shockwaves through the European Union, precipitating a surge in inflation and interest rates. In Luxembourg, this translated into soaring energy costs and mortgage payments, significantly burdening household budgets.

STATEC underscores a concerning trend of rising housing expenditure, with the share of disposable income allocated to housing expenses climbing from 19.7% to 30.2% between 2017 and 2022. This escalating financial strain poses challenges for residents' overall financial security and quality of life.

In addition, persistent increases in the poverty risk rate and widening income disparities underscore systemic challenges that warrant attention.

Unease among younger residents

Since 2021, STATEC has regularly asked residents to rate their satisfaction with their current lives, asking them to give a score out of 10.

According to the latest findings from October 2023, residents reported an average satisfaction score of 6.7 for their current life situation and 6.4 for their overall happiness.

However, underlying these figures is a growing anxiety, particularly evident since January 2022, attributed in large part to escalating living costs and soaring interest rates for property loans. It is worth noting that this unease is more pronounced among younger residents, who tend to report higher levels of anxiety and lower satisfaction levels compared to older residents.

Majority of employees happy with their jobs

86% of employed individuals say they are satisfied with their jobs. Seven out of ten employees feel adequately compensated for their work, with perceived fairness in remuneration positively influencing job satisfaction.

STATEC's analysis reveals a correlation between salary levels and the perception of fair compensation, indicating that higher earners generally report greater job satisfaction. However, this sentiment is not uniform across all income brackets, as individuals hovering just above the minimum social wage often perceive disparities in pay adequacy.