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LIVING IN SWITZERLAND

Why Switzerland is one of the world’s ‘happiest countries’

Despite dropping four places from last year, Switzerland still ranks among the world's happiest countries. Here's why.

Climbing the mountains in Zermatt, Switzerland.
Climbing the mountains in Zermatt, Switzerland. Photo by Joshua Earle on Unsplash

It may very well take you forever-and-a-day to find an affordable apartment in Switzerland’s largest cities only to be forced to spend entire Sundays in silence – but the Swiss don’t seem to mind, as Switzerland has once again been ranked among the world’s happiest places.

According to the World Happiness Report 2023, a publication from the UN Sustainable Development Solutions Network that draws on global survey data from people in about 150 countries, Switzerland still ranks among the top 10 happiest countries on earth.

In the just-released 2023 edition, Switzerland has, however, slid down to eighth place behind Norway (7th), Sweden (6th), Netherlands (5th), Israel (4th), Iceland (3rd), Denmark (2nd), and Finland, with the Nordic country topping the list for the sixth year in a row.

Though still in the global top 10, this year’s lower ranking stands in stark contrast to last year’s 4th place and to that in 2021 where  Switzerland ranked in the top three. In 2015, Switzerland even managed to top the list. 

Still, with a score of 7,240 in the 2023 ranking compared to Finland’s 7,804, Switzerland is not too far behind. 

Its neighbours, however, didn’t even make it to the top 10. Austria is in the 11th position just as it was in the 2022 edition, Germany dropped two places down to 14th, France now ranks 21st rather than 20th, and Italy dropped a whole five spots to 33rd.

READ ALSO: Switzerland named ‘world’s best destination for expats’

Why are the Swiss so happy?

Though happiness is of course subjective and measuring it may prove an impossible task, when looking at the report, which surveys data from the Gallup World Poll and evaluates various factors to measure happiness, such as GDP per capita, social support, healthy life expectancy, and the freedom to make life choices, it becomes evident where the Swiss get their contentment from.

Let’s look at life expectancy.

The Swiss population’s life expectancy at birth is currently one of the highest in the world, with Swiss men outliving men from other countries at a life expectancy at birth of 81.75 years, while Swiss women currently rank 7th at a median life expectancy of 85.08 years. This according to data published by the World Health Organisation (WHO).

Overall, the Swiss have the world’s second longest life expectancy (83.45 years), only surpassed by Japan’s 84.26 years average.

When it comes to how much of that lifespan can be lived healthily, latest findings on those trends, published in Swiss Medical Weekly, show an increase in the disability-free life expectancy for both men and women aged 65 over the 10-year study period.

The study found that by 2017 men aged 65 in Switzerland could expect to live another 16.2 years in good health. That was an increase of 2.1 years compared to 2007 when on average men could expect to live another 14.1 years without suffering a disability.

Meanwhile women in Switzerland aged 65 could expect to live for another 16 years in good health in 2017. This reflects an increase of 1.5 years compared to 2007.

Several factors may contribute to the Swiss people’s longer and healthier lives, such as well-distributed material wealth, a balanced and healthy diet, low risk working conditions and the country’s clean environment. The same could be said of their happiness.

A person climbing a rock

People are generally happy in Switzerland. Photo by Joshua Earle on Unsplash

Moreover, Switzerland has the second highest levels of per capita GDP in the world – even topping Finland – with its strong economic performance largely driven by the services and industry sectors.

In addition to that, Switzerland prioritises and values the promotion of peace and human rights as part of its Swiss foreign policy. The Federal Constitution of the Swiss Confederation stipulates that Switzerland must promote respect for human rights and democracy and the peaceful coexistence of peoples (Art. 54) in its foreign relations.

Its strong emphasis on promoting peace and unity can also be felt on a domestic level and is very evident in the country’s outstanding social services. If you ever find yourself in a ditch and are unable to financially support either yourself or your family, there are plenty of places to reach out for help in Switzerland. – and they deliver.

In 2021, there were 265,100 financial social assistance recipients in Switzerland on at least one occasion. In Switzerland, all Swiss citizens or those with a Swiss residence permit can apply for welfare, as can asylum seekers and refugees. Residents outside those categories can also apply for so-called emergency assistance.

Meanwhile, Switzerland-based residents who find themselves out of work through no fault of their own can also register with their regional employment centre (RAV) to receive unemployment benefits for a limited time.

Unemployed persons will generally receive a monthly allowance the equivalent to 70 percent of their insured salary, while those on lower incomes may receive 80 percent of their former salary depending on a number of criteria.

However, it can’t be ignored that Switzerland has dropped down the ranking compared to last year. This could be due to the worsening affordable housing shortage and the rising cost of living, although Switzerland has fared better than other European countries on that front. 

READ ALSO: Which parts of Switzerland are hardest hit by housing shortage?

Still, as you can see there are plenty of reasons for people to love life in Switzerland – and it’s not all down to Switzerland being the equivalent of a chocolate heaven, although that is a lovely bonus.

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ECONOMY

How the strengths and weaknesses of the Swiss economy will impact you

While the economies of many countries are struggling, Switzerland’s is doing well in comparison. What exactly are its strengths and weaknesses? And how will they impact you?

How the strengths and weaknesses of the Swiss economy will impact you

In its new analysis published on Tuesday, the Swiss Economic Institute (KOF) lays out the forecast for Switzerland’s economy.

Some of it is positive, and some less so.

On the whole, however, and given the difficult situation of the past two years, the outlook is promising (read more about this below).

Things are not always what they seem

Economists, like KOF’s director Jan-Egbert Sturm, point out that though the public’s perception of the current economic situation is skewed toward the negative, it is not necessarily so.

“The increase in prices in Switzerland was significantly lower than in neighbouring countries,” he said in an interview with Blick newspaper. 

So is inflation: even at its height in 2022, when it exceeded the 3-percent mark (a very high figure for Switzerland), it was still well below the EU average.

Today, the rate stands at below 2 percent — still lower than elsewhere in Europe

READ ALSO: Why Switzerland’s inflation rate has stayed low compared to elsewhere

 Another ‘misconception’ is that consumption habits in Switzerland have been impacted by inflation.

The general view is that “there is some reluctance to buy new, larger goods like washing machines or cars. But if we look at the figures closely, we see that consumption is evolving in a relatively stable manner,” Sturm said.

“The Swiss economy is generally quite solid,” he added.

Another plus: “the labour market remains robust, especially thanks to the services sector,” Sturm pointed out.

Companies are more reluctant to let employees go not only because there are not enough qualified workers to fill job vacancies, but also because employers “learned during the pandemic that they must be careful not to lay off workers too quickly,” so as not to create shortages when the crisis passes.  

Why does Swiss economy generally fare well in crises — and in general?

There are several reasons for that: 

Low unemployment / high employment

This dynamic fuels economic prosperity because it means that as people earn income, they not only spend more (thus boosting consumption), but they also pay taxes which fill up the government’s coffers.

And when that happens, everyone in Switzerland benefits: the cantons and their finances profit from the strength of the Swiss economy, as the federal government distributes some of its profits to cantons.

The government’s role

The Swiss are financially-savvy, which bodes well for the economy.

Take the debt brake, for instance.

According to the government, it is a mechanism designed to “prevent chronic deficits and keep federal debt from soaring”.

Just as it is for private spending, the government must be careful not to exceed the set ‘expenditure ceiling.’

“With a debt ratio of around 30 percent of gross domestic product, Switzerland remains in excellent shape by international standards,” the government pointed out. “The debt brake has not only significantly helped Switzerland to overcome multiple crises relatively well; it has also allowed for a considerable reduction in federal debt.”

According to the Organisation for Economic Cooperation and Development (OECD), “Switzerland’s public finances rank amongst the best in terms of solidity.”

READ ALSO : What is Switzerland’s debt brake and how does it affect residents?

All these factors combined have kept Switzerland’s afloat (or at least from drowning) during various global downturns, including the Covid pandemic and Russia’s invasion of Ukraine which sparked spiralling inflation in many places. 

But there are weak points as well

One of them is the strong franc.

Actually, its strength vis-à-vis the euro and US dollar is a double-edged sword.

On the positive side it benefits the import industry and, ultimately, the consumer.

But it is quite the opposite for exports.

Switzerland relies heavily on trade with the EU, mainly Germany, but when the euro is weaker than the franc, Swiss goods are too expensive abroad — especially if countries concerned are in recession and simply can’t afford to buy from Switzerland.

For this reason, Swiss industries that depend on exports, usually feel the ‘crunch’ more than import-based sectors.

Also, the strong franc may very well enable Switzerland-based earners to enjoy numerous stays abroad, but it also makes holidays in Switzerland very pricy for overseas tourists. This, in turn, has a negative effect on the Swiss economy as well.

Therefore, the state of Switzerland’s economy is not entirely in its own hands, but depends on forces beyond its control.

As KOF puts it, “the sluggish global economy is slowing the growth of the Swiss economy” as well.

What can we expect ahead?

This is where the good news comes in.

“Real wage increases are expected following the declines of recent years,” KOF says. “This will boost purchasing power and, together with population growth, should support private consumption.

Therefore, “households’ spending is expected to increase in the coming year. This trend will be supported by a gradual levelling-​off of inflation and a sharper rise in disposable incomes.”

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