Are you OK Australia?

Measuring the material factors of our lives ­– like finances, work and health – can tell us a lot about the state of Australian society and the policy challenges. But what are the things that matter most to us?

To help answer this question we need to know not just what people have and don’t have, but how they feel – what researchers call subjective wellbeing.

The Household, Income and Labour Dynamics in Australia (HILDA) Survey asks this question of around 17,000 Australians every year.

It shows that over almost two-decades (between 2001 and 2018) Australians’ life satisfaction has been fairly constant at relatively high levels. But there are gaps, with the unemployed, immigrants from non-English speaking countries and Indigenous Australians faring worse than other Australians.

The results highlight the central importance of basic things like health and safety in life satisfaction, as well as social contact.

Combined with the reduced satisfaction that comes from unemployment, the data is a warning that the wellbeing of many Australians is likely to have been significantly hurt this year by the economic and social cost of controlling the COVID-19 pandemic.

Life satisfaction, as one measure of subjective wellbeing, is measured in HILDA by asking Australians: “All things considered, how satisfied are you with your life overall?”

Responses can range from zero to 10 – the higher this score, the more satisfied a person is with his or her life as a whole.

Respondents were also asked to rate their satisfaction with different areas or domains of life – namely job, finances, housing, safety, leisure and health.

Australians are generally quite satisfied with their lives. In 2018, for example, the average life satisfaction score was about 7.92, which suggests that the average Australian reports a high level of satisfaction with life.

In terms of gender differences, women report consistently higher levels of life satisfaction when compared to men, and this has remained consistent over the 18 years of HILDA.

There are also some age differences.

For instance, the youngest (15-24) and oldest (65 and over) have the highest life satisfaction, whereas Australians in the 35-44 and 45-54 age groups are consistently the least satisfied with their lives.

This trend – that wellbeing peaks in the youngest and oldest age groups while remaining lowest among the middle aged – is common across most of the world.

There are some interesting differences in average levels of subjective wellbeing for Australians in 2018. For instance, women are less satisfied with leisure time than men are, which may reflect the greater child-caring burden on women.

Health, unsurprisingly, seems to play an important role as well.

People in poor general or mental health, and those with a disability, have substantially lower average life satisfaction than people without such health problems.

As might be expected, the employed have much lower satisfaction with their leisure time than those who are unemployed or not in the labour force. But regardless of gender, the unemployed are much less satisfied with life.

Indigenous and non-Indigenous Australians overall reported similar levels of life satisfaction in 2018, but there are relatively large differences in some important domains that suggests Indigenous Australians do worse.

Compared to non-Indigenous people, Indigenous Australians report lower satisfaction with finances, housing and health.

Apart from health satisfaction, immigrants from non-English speaking countries report lower wellbeing in all domains including with life overall.

When we consider satisfaction in different life domains, Australian men and women are least satisfied about their finances, although financial satisfaction has been increasing somewhat over time.

Australians are most satisfied about their personal safety and here, as well, safety satisfaction has shown an upward trend over time. Of note is that Australians’ satisfaction with health, although relatively high, has been on a slight downward trend over the past two decades.

So, what factors appear to determine overall life satisfaction for Australians over the 2001-2018 period?

The HILDA results confirm a so-called ‘U-shape’ relationship between age and life satisfaction, implying that life satisfaction is relatively high at younger ages, declines during middle age, and starts increasing again at a later stage.

Married people are more satisfied than those in other marital statuses, although one interesting exception is among women in de facto relationships, who are slightly more satisfied with life than married women.

Somewhat counterintuitively, higher levels of education are related to lower reported life satisfaction. A possible explanation for this is the hypothesis that more educated persons have higher aspirations which, if not met, may have a detrimental wellbeing effect.

Having children is positively related to life satisfaction for men, but for women there is no relationship between children and life satisfaction. Again, this may in part reflect greater childcare responsibility and is also consistent with women’s lower leisure satisfaction.

People with a disability are especially more likely to have lower life satisfaction, which points to the detrimental impact that adverse health conditions can have on wellbeing.

Having regular social contact and social relationships leads to higher life satisfaction for both men and women, underscoring the importance of maintaining social ties.

So, we expect the social restrictions imposed to control COVID-19 this year to have had a detrimental effect on the wellbeing of many Australians, especially in Melbourne where measures were stricter and longer lasting.

For both women and men there is a positive association between household income and life satisfaction, but the effect is pretty small, which suggests that things other than money are more important.

Although for women there is no relationship between region of residence and life satisfaction, men living in major urban areas are much less satisfied with life compared to men living in non-urban areas.

If we assume that satisfaction in the various domains determine overall satisfaction with life, which domains then are most important in explaining life satisfaction?

For all Australians, regardless of age or gender, changes in health satisfaction lead to the largest changes in life satisfaction. After health satisfaction, people’s satisfaction with personal safety are also associated with large increases in overall life satisfaction.

These findings imply that what Australians consider part of their basic needs – being healthy and feeling safe – are some of the most important contributors to overall wellbeing.

So, what does Australians’ wellbeing look like overall?

For the most part, the average Australian is doing very well.

Overall life satisfaction is generally high, and satisfaction with safety and housing rank among the highest scored domain satisfactions, suggesting most Australians are very satisfied with the provision of their basic needs.

But it is clear the unemployed have very low levels of wellbeing in most life domains. Subjective wellbeing is also quite low among immigrants from non-English speaking countries, as well as among Indigenous Australians.

These observations stress the importance of a strong emphasis on factors like job creation and skills development for the unemployed, additional support for immigrants that would assist with integration into Australian society, and continued emphasis on Indigenous wellbeing.

Finally, Australians suffering from poor health – physical, mental and those with a disability – require effective support to enhance overall wellbeing.

The efficient and effective provision of health services to those most in need is paramount.

Further, because health satisfaction is the strongest predictor of overall life satisfaction in Australia, improvements in individual health circumstances are likely to filter through into greater overall life satisfaction.

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