For the past two years, the United Nations has ranked Finland as the world's happiest country. The U.S. has never scored in the top 10 since the index was launched in 2011, and in 2019 it plummeted to 19th.
While Finland seems perennially chirpy, the U.S. is seeing growing rates of depression, drug addiction, and suicide. Here are six reasons that residents of Finland (7.1 percent of whom are immigrants, BTW) are so happy when compared with their American counterparts:
1. Finns pay higher taxes but see more results.
According to the conservative think tank the Brookings Institute, Finland collects 44 percent of its gross domestic product (GDP) in taxes versus the 26 percent of GDP that the U.S. collected in 2015. (For comparison, Denmark collects 46 percent and Mexico 17 percent.)
So taxes are relatively high in Finland, which you'd think would tend to reduce overall happiness. However, higher taxes don't seem to bother the Finns, for two reasons:
First, taxes in Finland are highly progressive, so that the rich pay much more than the poor or middle-class. Finland also has a legal system that extracts larger fines from the wealthy than the poor or middle-class. In one recent case, a driver with an annual income of $7.3 million was fined $103,000 for going 65 mph in a 50 mph zone. It's hard to get too upset about high taxes when the rich are visibly carrying their share of the burden.
Second, and more important, taxes (especially federal taxes) in the U.S. often seem as if they're being wasted on privatization boondoggles, and so-called nation-building. By contrast, the Finns tend to see the benefits of their taxes in immediately useful services, like free health care, free child care, and infrastructure.
2. Finland makes life easier for working parents.
In the U.S., working parents (especially single ones) struggle to find good, inexpensive day care, are penalized for taking time off to deal with family issues, and are expected to sandwich childbirth into their schedules as if it were an unwelcome distraction. Needless to say, this creates a great deal of unhappiness and dissatisfaction.
By contrast, Finland has an extensive support system for families. As BusinessCulture.org summarizes:
Finland's options for family leave are numerous. Every child under school age is entitled to municipal day care, which is organized in day care centres, in family day care and in playgroups. The family's income level influences day care fees. There are also various private day care services available... it is possible to stay at home and take care of your child until they are three years of age without fear of losing your job. Once your child has entered school, you can adjust your working hours to facilitate child care.
Finland also has universal free health care, for which it pays about 9 percent of its GDP, as opposed to the U.S., which spends almost exactly twice as much (18 percent). While the U.S. has a more advanced health care system in terms of technology, many outcomes are better in Finland than in the U.S. Infant mortality in Finland, for example, is 1.7 deaths per 1,000 births; in the U.S., it is 5.8 deaths per 1,000 births.
3. Finland mandates generous paid time off.
In the U.S., about a third of all jobs have no paid vacation whatsoever. Jobs that do have paid vacation typically start with 10 days the first year, a number that gradually increases. However, many American firms are trying to phase out paid vacations by discouraging employees from taking them and turning them from an earned benefit into a negotiable perk.
Finland, by contrast, mandates that newly hired workers get two days of paid vacation for every month of full-time work, which of course comes out to 24 days. In addition, Finland mandates 15 paid holidays versus an average of 7.6 in the U.S. Rather than discouraging workers from taking vacations and holidays, Finnish businesses actively encourage it.
All that time off does appear to have a small negative effect on productivity, if measured by the amount of GDP resulting from an hour's worth of work: Finland ($55 per hour) is less "productive" than the United States ($68 per hour). That difference seems less significant, however, compared with the difference between, say, Luxembourg ($93 per hour) and Russia ($25 per hour).
4. It's easy to do business in Finland.
My thinking may be distorted by writing for Inc.com since 2011, but I can't help but believe that people are happier when they have the opportunity to start businesses and make them successful. From that perspective, countries that make life easier for entrepreneurs and startups are likely to make people happier.
There's a common perception in the U.S. that Finland is a socialist country that heavily regulates businesses. Nothing could be further from the truth. Although Finland does have a state monopoly on liquor sales, it has a free-market economy. According to the Trading Economies research firm:
The Ease of Doing Business Index ranks countries against each other based on how the regulatory environment is conducive to business operation and stronger protections of property rights. Economies with a high rank (1 to 20) have simpler and more friendly regulations for businesses... Finland averaged 13.67 from 2008 until 2019, reaching an all-time high of 20 in 2019 and a record low of 10 in 2014.
Not surprisingly, given the business-friendly climate, Finland has plenty of billionaires: roughly 1 per 786,000 residents, a figure that is roughly comparable to the 1 per 559,000 residents in the U.S. who are billionaires.
5. Finland has truly stellar public schools.
In the U.S., education policy is set from the top down. Federal and state government sets standards and mandates that public school teachers are expected to follow (a.k.a. "teach for the testing"). While U.S. public school system performs reasonably well among countries that educate their entire population, Finland's universal public school system is by most accounts the best in the world.
One reason may be that in Finland, the teachers who know the individual students are given the power to decide how best to teach them. Smithsonian magazine explains:
Most of Finland's 62,000 educators in 3,500 schools from Lapland to Turku [are] selected from the top 10 percent of the nation's [under]graduates to earn a required master's degree in education. Many schools are small enough so that teachers know every student. If one method fails, teachers consult with colleagues to try something else. They seem to relish the challenges. Nearly 30 percent of Finland's children receive some kind of special help during their first nine years of school. [As one teacher put it:] "Children from wealthy families with lots of education can be taught by stupid teachers. We try to catch the weak students. It's deep in our thinking."
In addition, undergraduate college in Finland is free (like K-12 in the U.S.), which means that one can get a bachelor's degree without spending a small fortune or going deep into debt. As a result, Finland has excellent upward mobility, compared with the U.S., where downward mobility has become far more common.
6. Finland has younger leaders.
Every U.S. president since 1992 has been a Baby Boomer and it looks likely at this point that a Boomer will be president until at least 2024. While some Boomer leaders have attracted a following among the young, the Boomer generation has (by and large) been remarkably reluctant to let younger people take on leadership roles.
Not surprisingly, U.S. Millennials--a large cohort--have grown increasingly frustrated, especially since U.S. Boomers--very much led from the top--clearly expect Millennials to foot the bill for 28 years of gross mismanagement (see: "War in Afghanistan"), not to mention the Boomer generation's reluctance to address the dangers of climate change.
As a result, politics in the U.S. tends to be a depressing--like a 1970s rock band doing its fifth farewell tour.
Finland's political leadership could not be more different. The current prime minister, Sanna Marin, is 34. In fact, four of the five top political leaders in Finland are Millennial women and the fifth is a Gen-X woman. As someone who's worked for both Millennials and Boomers, I can say without hesitation that Millennials are on average savvier, smarter, and far more likely to solve today's problems than their Boomer counterparts.
And they're certainly a lot less depressing.
One wonders whether the U.S. might not be stuck in the emotional doldrums had U.S. Boomers been as gracious as Finland's and ceded power to people with new perspectives and new ideas.