Skip to main content

Verified by Psychology Today


Why Is Finland So Happy?

This social factor may hold the key.

The United Nations’ annual World Happiness Report – which ranks nations according to self-reported subjective wellbeing – has just come out. And this year, the beautiful country of Finland has emerged on top! But other than this new victor, there are no real surprises. For the top 10 consists of the same countries that dominate every year, with Finland being followed by Norway, Denmark, Iceland, Switzerland, Netherlands, Canada, New Zealand, Sweden and Australia1. Why is that? What makes these countries so conducive to wellbeing? No doubt the answer is multi-causal, with factors like wealth and democratic accountability playing key roles. However, comparatively wealthy and democratic nations, like the UK and USA, don’t fare nearly so well. As such, many theorists have suggested that a significant factor is their levels of equality.

The perils of inequality

We live in unequal times. Maybe even the most unequal of times. What’s more, levels of inequality are widening further. Since the 2008 financial crisis, the world’s richest 1% have seen their share of the globe’s total wealth rise from 42.5% to an astonishing 51.1% in 20172. Meanwhile the world’s 3.5 billion poorest adults account for just 2.7%. And within some countries, levels of inequality are even more extreme. In the United States, it has been estimated that just three individuals possess more wealth collectively than the bottom 50% of the country (roughly 160 million people)3.

Inequality matters for many reasons. High among these is that it impacts upon the health and wellbeing of the populace, including those near the top of the pyramid. This point dawned upon economists when they noticed that although countries like the USA and the UK were growing richer year on year, their populations overall seemed no happier. This phenomenon became known as the ‘Easterlin Paradox’4 , although of course it only seems paradoxical because the dominant ideology of consumer capitalism convinces us that riches equal happiness.

It’s not that this equation is untrue per se (and indeed, some theorists have challenged the basic tenets of the Easterlin paradox5). Money can buy wellbeing – to an extent. For very poor countries and people, gains in wealth do generate reliable increases in wellbeing, since they are then able to afford life protecting and nurturing essentials like housing and healthcare. But once such countries reach a level of prosperity where most of the population can afford most of the basic necessities most of the time, simply piling more wealth on top has no particular impact on overall happiness.

Social capital

At that point, other factors come into play. This is the message of Abraham Maslow’s famous ‘hierarchy of needs’6. He argued that human beings have a core set of needs that must be satisfied if we are to be happy and well. This was not a particularly new idea, but Maslow’s genius was to realise that such needs could be arranged in a hierarchy. At the base are ‘lower’ level needs – ‘lower’ in that they are foundational, not less important – inculding being safe, fed, secure and so on. But once these have been met, others assume prominence, such as being respected and loved, and finding meaning and fulfilment.

These dynamics play out in the social sphere. Once people’s basic needs are covered, the most important factor in a society's wellbeing is its level of equality – since this impacts upon people’s higher level needs. As Richard Wilkinson and Kate Pickett demonstrated so persuasively, more equal societies have higher levels of 'social capital'7. This is the extent to which we trust and feel connected to those around; the quality and quantity of our friendships; the strength of our support networks, both personal and structural (such as the welfare state); and community cohesion more broadly8. And, unsurprisingly, social capital strongly influences wellbeing9.

That is, more equal societies – with their higher levels of social capital – do better on just about every available metric10: mental health, crime rate, level of trust, educational performance, and so on. Moreover, it’s not just the poor who do badly in more unequal societies. The wealthy may be able to insulate themselves, to an extent, with gated communities and so on. But they cannot escape the social fabric completely, and to the extent that this is damaged by poor social capital, by fragmentation, resentment and mistrust – all of which are products of inequality – they will suffer too.

Lessons from the Nordic nations

This association between societal equality and wellbeing is perhaps exemplified most clearly in the example of the Nordic countries. For, as we saw above, these invariably top the happiness tables that have proliferated recently11. Ok, these countries are relatively affluent and stable, which certainly helps12. However, comparatively wealthy places like the UK and USA do not share the same high levels of overall life satisfaction13, as per the Easterlin paradox.

As such, many theorists attribute these trends to the Nordic nations’ low levels of inequality, as reflected in and driven by egalitarian social policies14. To give one example, the average CEO’s salary in the USA is 354 times higher than those of the company’s workers, whereas in Denmark it is just 48 times higher15. As a result, Nordic people generally have high levels of social capital, which positively influences their wellbeing16.

These patterns of social cohesion are even reflected in their language – my own area of research – as reflected in terms like talkoot. This is a good example an untranslatable word, one that lacks an exact equivalent in our own tongue. I’ve become fascinated by such words, particularly ones relating to wellbeing (as a researcher in positive psychology). To that end, I’ve been creating a ‘positive lexicography’, as I explore in two new books (please see bio for details). These words are significant for many reasons. Most intriguingly, they can reveal phenomena which have been overlooked or underappreciated in one’s own culture , but have been identified in another.

In this case, talkoot is a Finnish term for a ‘short, intensive, collective effort with a tangible goal’17. Basically, a communal project that people engage in for the good of the group, rather than for individual benefit. Similar terms can be found across the Nordic languages, such as the Swedish cognate talko. Of course, communal actions of this sort are not only found in Nordic countries. But it is striking that they have developed a particularly rich language to reflect the value of social connectedness (but also some of the risks of an over-emphasis on cohesion, as reflected in the notion of Janteloven). And given Finland's ascendancy to the top of the world happiness rankings, maybe we could try to emulate their example.


[1] J. Helliwell, R. Layard, and J. Sachs, World Happiness Report 2018 (Geneva: United Nations, 2018).

[2] Credit Suisse Research Institute (2017). Global Wealth Report. Zurich: Credit Suisse Research Institute.

[3] Collins, C., & Hoxie, J. (2017). Billionaire Bonanza: Forbes 400 and the rest of us. Washington, DC: Institute for Policy Studies.

[4] Easterlin, R. A. (1995). Will raising the incomes of all increase the happiness of all? Journal of Economic Behavior and Organization, 27(1), 35–47.

[5] Veenhoven, R., & Vergunst, F. (2014). The Easterlin illusion: Economic growth does go with greater happiness. International Journal of Happiness and Development, 1(4), 311-343.

[6] Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–396.

[7] B. Rothstein and D. Stolle, ‘Introduction: social capital in Scandinavia’. Scandinavian Political Studies 26, no. 1 (2003): 1–26.

[8] P. Bourdieu, ‘The forms of capital’, in Handbook of Theory and Research for the Sociology of Education, ed. J.G. Richardson (New York: Greenwood, 1986), 241–258.

[9] J.F. Helliwell, ‘Well-being, social capital and public policy: what’s new?’ Economic Journal 116, no. 510 (2006): C34–C45.

[10] R.G. Wilkinson and K. Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better (London: Allen Lane, 2010).

[11] J. Helliwell, R. Layard, and J. Sachs, World Happiness Report 2018 (Geneva: United Nations, 2018).

[12] Kaufmann, D., Kraay, A., & Zoido-Lobatón, P. (1999). Aggregating governance indicators. World Bank Policy Research Working Paper No. 2195. Washington, D.C.

[13] Easterlin, R. A. (2015). Happiness and Economic Growth: The Evidence. Netherlands: Springer.

[14] Hyyppä, M. T., & Mäki, J. (2003). Social participation and health in a community rich in stock of social capital. Health Education Research, 18(6), 770-779.

[15] S. Kiatpongsan and M.I. Norton, ‘How much (more) should CEOs make? A universal desire for more equal pay’. Perspectives on Psychological Science 9, no. 6 (2014): 587–593.

[16] B. Rothstein and D. Stolle, ‘Introduction: social capital in Scandinavia’. Scandinavian Political Studies 26, no. 1 (2003): 1–26.

[17] I. Huvila, Information Services and Digital Literacy: In Search of the Boundaries of Knowing (Oxford: Cliandos Publishing, 2012), at 58.

More from Tim Lomas Ph.D.
More from Psychology Today
More from Tim Lomas Ph.D.
More from Psychology Today