Systems Thinking to Understand National Well-Being from a Human Capital Perspective

Sibel Eker,Leena Ilmola-Sheppard

doi:10.3390/su12051931

Sibel Eker, Leena Ilmola-Sheppard

Open Access

https://doi.org/10.3390/su12051931

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Abstract

Well-being has become an important policy goal to replace gross domestic product (GDP) as an indicator of national progress. Several multidimensional metrics and indicators of well-being have been developed mostly based on the four-capital model that includes natural, economic, human and social capital. These multidimensional measures of well-being, however, are highly categorical and lack a systems perspective that focuses on underlying mechanisms of the metrics and the interconnections between them. This study aims at bringing a systems thinking approach to understanding and measuring national well-being, particularly from a human capital perspective. For this purpose, we employ a qualitative systems mapping approach and identify the direct or indirect relationships between the well-being indicators related to human capital. The results show that the human capital system is governed by several reinforcing feedback loops through economic progress, health and life expectancy, which gives a central role to human capital to enhance well-being. There are balancing loops, however, that may have adverse effects on human capital formation and well-being, for instance through migration and ageing. Future studies can focus on the other three subsystems in the four-capital model, and on quantifying the relationships between different dimensions of well-being.

Highlights

Well-being has recently become a focal point in the policy agenda of several national governments due in particular to its multidimensional outlook on human welfare and alignment with the United Nations (UN) sustainable development goals
The examples of such multi-dimensional measures start with the UN Human Development Index (HDI) that combines life expectancy and education level in addition to gross domestic product (GDP) [5], the 10-dimensional well-being measure of the UK’s Office for National Statistics [6], and the Organization for Economic Co-operation and Development (OECD) Better Life Index (BLI) that combines a wide variety of metrics from economy to housing and health [7]
This study contributes to understanding and measuring national well-being by initiating a systems thinking perspective on the human capital component of well-being

Summary

Introduction

Well-being has recently become a focal point in the policy agenda of several national governments due in particular to its multidimensional outlook on human welfare and alignment with the United Nations (UN) sustainable development goals. Earlier philosophical definitions of well-being were based on welfarism, following a utilitarian view on maximizing the pleasant and minimizing the unpleasant [2] This view was manifested in measuring national well-being in macro-economic terms, such as GDP, which has been the measure of national progress for several decades. The inadequacy of GDP to measure national progress and well-being has been increasingly acknowledged [3], and alternative indices based on subjective well-being or multidimensional statistical indices have been proposed [4] The examples of such multi-dimensional measures start with the UN Human Development Index (HDI) that combines life expectancy and education level in addition to GDP [5], the 10-dimensional well-being measure of the UK’s Office for National Statistics [6], and the Organization for Economic Co-operation and Development (OECD) Better Life Index (BLI) that combines a wide variety of metrics from economy to housing and health [7]

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