The secret to Danish happiness

by philg

After a short trip to Denmark (photos) I’m beginning to formulate some theories on why Danes score high on world happiness surveys.

First, they don’t seem to have better answers than we do in the U.S. to the tough challenges. There are lots of jobs for competent, educated people. Danes who did not do well in school and who did not advance beyond high school are at home living with their parents. Danes are simultaneously admitting immigrants from Muslim countries and surrounding government buildings with concrete blocks to deter an attack from these guests whom they don’t fully understand.

Second, part of Danish happiness is predicated upon being willing to live at what for an American would be a fairly low material standard of living. Residential homes are not big or fancy. Furniture tends to come from Ikea.  A 10-year-old compact car with broken air conditioning is a perfectly fine (single/only) car for a family of three. A typical urban dweller won’t own a car at all, but will rely on a bicycle or public transport (maybe not too much fun in the cold wet winter!). If we compared Danes in Denmark to Danish-Americans in the U.S. it would certainly be clear who were the rich cousins. One upside of the whole country being somewhat poor is that very few people have the means to indulge in conspicuous consumption. Conspicuous consumption makes everyone in a society poorer and less happy. Consider the owner of the 10-year-old sedan that gets a family reliably to every necessary destination. Now  a neighbor buys a $50,000 SUV. The sedan owner wants to keep up with the Jones family and their pavement-melting SUV so he takes on a second job and cancels plans to take a nice summer vacation. Now he and everyone else in the neighborhood have $50,000 SUVs but for most of them it isn’t something they would have bought otherwise, which in turn means that they will derive less than $50,000 in value from having the new vehicle compared to the old. If the former sedan owner previously would have only paid about $10,000 to swap our his old car for the new SUV then he suffers a $40,000 loss as a consequence of conspicuous consumption. This may be one reason why people suffer a measured loss of happiness when neighbors get wealthier.

One way to be happy with less income is to not need a car, a $9,100/year sinkhole for American family wealth (source). Unless a transport service runs fairly frequently it cannot serve as a replacement for a car. The Danes run the Metro every six minutes even at off-peak times and keep it going 24 hours per day (the only U.S. city that comes close to this is New York). Trains that handle hour-long trips to outlying towns will run at least three times per hour all day. Roads almost everywhere have dedicated lanes for bicycles (see separate posting). These lanes are separated from the car lanes by a curb. So a Dane can always use a bicycle safely. He or she can always rely on the Metro. He or she can conveniently rely on train service. Possible lesson for the U.S.: either shut down public transit or beef it up to the point that people can get rid of cars (of course, we would probably want to reconsider running these services with government employees, who earn as much as $100 per hour (plus benefits) to drive a bus (see Boston Globe). Eliminating a $9,000/year after-tax expense is equivalent to giving an American family a $12,000 to $18,000 pay raise (depending on income level and combined city/state/federal income tax rate). Most families would be happy if the adults got a raise like that!

Another way to be happy with less income is to spend less time occupied with money. The smallest coin in general circulation is half a crown. This is worth about 9 U.S. cents. In other words, the smallest value coin that a Dane might conceivably handle is a dime. So people aren’t counting pennies. Sales tax is included in the published price so you don’t end up spending 10 percent more than expected, as you would in California, for example. Credit/debit cards are accepted everywhere for everything so you could spend months without handling cash.

Danish life seems to involve less uncertainty. You can be pretty sure that you aren’t going to strike it rich. There are only a handful of wildly successful enterprises in Denmark, e.g., Maersk and Novo Nordisk. At the same time you aren’t going to become destitute. So you can concentrate on stuff other than trying to earn more money, e.g., connections to family and friends, participation in community groups, hobbies, etc. These non-work items are the ones that happiness nerds say are the most important.

Divorce, a big potential source of unhappiness, is simpler, cheaper, and faster, as covered in a separate posting.

One element of certainty that not everyone will appreciate is the adherence to and enforcement of rules without exceptions. We spent a day with a guy who uses a wheelchair. We’d be stopped at the side of a country road trying to cross. In the U.S. it would be almost unimaginable for a car not to have stopped to let a wheelchair-bound person cross (imagine trying to explain to a passenger why you hadn’t stopped!). But in Denmark the cars would whiz by. They had the right of way under the rules and they were taking it, regardless of the fact that the pedestrian happened to be in a wheelchair. We parked at Hamlet’s castle, in an out-of-the-way town northeast of Copenhagen. The parking lot was only about one third full. Everyone parked there was buying $13/person tickets to see the castle. Yet we had to buy a timed ticket to park there until 3:03 pm. We were a little late getting back and discovered that at 3:08 pm the authorities had noticed our overtime parking and given us a $116 ticket (an effective rate of $1392/hour for those last five minutes). [Separate issue: why oh why can we not have a Singapore-style system where a transponder in the car and sensors in parking lots and on congested roads take the money out of our checking accounts without us having to pay constant attention?]

As has been pointed out by a commenter on a previous post, Danes may have more affection for their more-or-less unified government than Americans have for our dog’s breakfast of local, state, and federal governments. Taxes are high in Denmark but services are visible: fantastic parks and playgrounds, beautifully maintained public facilities of all kinds, paid-for education through college and graduate school, paid-for health care, etc. In the U.S. the government doesn’t provide that much to employed middle class families. We get a public school that was supposed to be for our kids but is often run for the benefit of school system employees instead. We get to drive on roads that are very poorly maintained compared to Danish roads and lacking in bicycle infrastructure. We have fire and police departments, of course, but ideally we don’t rely on them for hands-on assistance every day.

Having a smaller socially cohesive society yields substantial savings in time and money. Partly due to trust and partly due to having civil law (based on the Roman/Napoleonic Code) rather than common law, transactions can be very simple. I rented a $1000 bicycle in Denmark for a week without putting down any kind of security deposit, signing any liability waiver forms, or receiving a helmet (Danes do a huge amount of cycling but helmet use is uncommon compared to the U.S.). Museums had spent a lot less time writing out elaborate rules for what you could and could not do and employ very few guards by American standards. The Copenhagen airport doesn’t have the fancy X-ray scanners and you don’t take off your shoes to go through the metal detector (it is extremely uncommon to wait more than 10 minutes to get through security, according to locals). Office buildings spend much less on security. The U.S. per-capita GDP is much higher than Denmark, but much of the GDP is spent on writing and signing liability waivers, hiring security guards, paying TSA screeners and investing in fancy machines, running prisons to incarcerate people at the world’s highest rate (Wikipedia shows that Denmark has 1/10th as many prisoners per capita as the U.S.), etc. This is not to say that life in Denmark is perfect. The Louisiana Art Museum warns visitors about thieves breaking into cars in the parking lot. I helped a Canadian woman adjust a used bicycle that she had just bought because her previous bike had been stolen. Even in a country where all of the necessities can be obtained from the state, some people will decide to augment their material lifestyle through crime.

What about people stuck in low-wage service jobs? How happy are they? I asked a smiling young woman who was serving us ice cream ($6/cone) if she loved her job. “How would you like to do this for 8 hours per day?” she replied. “That girl was probably making about $22 per hour,” an American emigrant to Denmark pointed out. “And she’ll take home half of it after taxes. You will never get the kind of service in a restaurant that you expect in the U.S. because the waitstaff aren’t working for tips.” Mostly what I noticed was that there were fewer workers in many situations compared to the U.S. and more effort put into saving labor. For example, we went to a supermarket at about 2:30 pm on a weekday and a 15-person line had developed to wait for the single cashier. At the airport Icelandair had chosen to employ a staff of zero at the check-in desks. Passengers were expected to get a boarding pass from a machine and drop their bags at an SAS counter. Before going through security the Danes had a step to verify the validity of one’s boarding pass. Where in the U.S. this was done by a private security screener and then again by a TSA agent, in Denmark this is done with a self-service machine.

Finally… how about those prices? Is it possible to be happy in a country where McDonald’s charges for ketchup? Will a person be thrilled if the only available solution to thirst is a $4 bottle of water or trying to drink from the tap (museums don’t have drinking fountains)? For a visitor staying with a Danish host one answer is to live like a Muslim during Ramadan. Eat a big breakfast and drink a lot of tap water prior to heading out for a day of sightseeing. Try not to consume any food or drink until returning in the evening. Buy all souvenirs at the airport before departing so that you can get a 25% discount (the shops and prices are the same, but you won’t pay value-added tax if you can show a ticket back to the U.S.).

Some links:

[Travel tips: Consider flying Icelandair. The flight attendants are friendly and enthusiastic. The planes are on time and not too packed. The stop in Iceland means that no leg is longer than five hours. There is no Heathrow-style 45-minute security line to change planes. You’ll clear immigration in Iceland in about 5 minutes and won’t be asked to show your passport again when you arrive in Denmark. They sell Angry Birds lollipops in the duty-free shop.]

More: See a few of my photos

19 thoughts on “The secret to Danish happiness”

  1. “part of Danish happiness is predicated upon being willing to live at what for an American would be a fairly low material standard of living. Residential homes are not big or fancy. Furniture tends to come from Ikea. A 10-year-old compact car with broken air conditioning is a perfectly fine (single/only) car for a family of three.”

    I believe the above is comparing the average Dane with the upper-middle class American. Around here where I live (Massachusetts, just like you, Phil), the residential home of the average person isn’t big, fancy, new, energy efficient, very clean etc. The furniture is a lot of times of fairly modest quality and aspect, way below what you can get from Ikea (which, btw, I find very nice and have enjoyed for many years). Surprisingly, the median age of the cars driven in USA is about 10 years (http://en.wikipedia.org/wiki/Passenger_vehicles_in_the_United_States).

    “One upside of the whole country being somewhat poor is that very few people have the means to indulge in conspicuous consumption. Conspicuous consumption makes everyone in a society poorer and less happy”

    I’m really not sure about the assertions above. I believe there are plenty of other places in Western Europe, for example, where lots of people are living like there’s no tomorrow and yet I don’t think this makes “everyone” poorer and less happy. Sure, some will be miserable that they can’t afford what others do but I can personally tell you what it feels like when everybody is equally poor. I was was born and raised in a very egalitarian society (Eastern Europe under the Communist regime). Practically everybody was equally poor – obtaining a color television was a *big* deal in the 1980s, a pair of blue jeans cost the equivalent of an engineer’s one month’s pay, on the black market, purchasing a new car (of lousy quality, domestically produced, based on 30-year old designs) required putting your name on a list and waiting for FOUR YEARS etc. This all changed in a few short years after the fall of Communism. With the exception of those who couldn’t directly benefit from the rising standard of living (e.g. some retired people, some with poor/deprecated skills etc) pretty much everyone else was much happier and was saying that “now we realize how much we were held back by the Communism”.

  2. “That girl was probably making about $22 per hour – an American emigrant to Denmark pointed out. “And she’ll take home half of it after taxes””.

    “buy all souvenirs at the airport before departing so that you can get a 25% discount (the shops and prices are the same, but you won’t pay value-added tax if you can show a ticket back to the U.S.)”

    So to put one and one together, this means that after the government takes half your pay they also charge a 25% value added tax on everything you buy. And in exchange you get free healthcare, wonderful trains and bike lanes. But you are somewhat poor and with zero chance of changing this. Now try to be happy and talk to your family and friends, or go play with your Legos, because you won’t have money left for anything else. This doesn’t sound too appealing to me but the American readers who disagree are free to immigrate to Denmark to see for themselves.

  3. I once heard a politician justify this system as “Even a minimum wage worker pays a significant tax bill, even though he’s a net recipient of government money. Even a millionaire has full access to state-funded services, even though he doesn’t need them. This way, the poor will not vote to raise taxes on a whim, and the wealthy will vote to improve dysfunctional government services, rather than abolish them.”

    People often talk about the social coherence necessary to support a progressive tax system, but until I heard this, it hadn’t occurred to me that the way taxes are structured might, in turn,influence social coherence.

  4. My friend told me about helmet use in Denmark. They were careful and did a study. With helmet laws people ARE more likely to wear a helmet. They are also measurably less likely to use their bicycle. The total cost to society for more people with head injuries vs. more people getting the exercise falls on the side of no helmet law.

  6. @Bas

    Social contribution (gross tax) – 8%
    Municipal tax – 23% – 28%
    Health tax (Region tax) – 8%
    Over DKK 42,900 to DKK 389,900 (7500 to 70000 US dollars) – 3.76%

    So the total appears to be 8% + about 25% + 8% + about 4% = around 45%.

  7. hi Philip: Long time no interface, but see your blog link on twitter, so reviewed as our oldest daughter (21 yrs old) anthropology major at Grinnell College, just returned from a 5-mo study abroad in Copenhagen. Thought her blog might offer a broader frame of reference, or a more open-minded take on Denmark . . . .

    Here’s her blog: http://mackenziiie.tumblr.com/

    enjoy!

    Kelly Shanahan

  8. Does Denmark not let you get VAT rebates on items you purchase in country by showing your receipts at customs on the way out?

  9. Happiness also depends on drinking habits: the Danes do wine and beer but don’t do a lot of hard liquor (1.78 liters per person a year). That’s not too much if compared with other European countries. Heavy booze and depression go hand in hand. (what’s the Danish word for binge drinking?)

    http://en.wikipedia.org/wiki/List_of_countries_by_alcohol_consumption

    I tend to agree that there seems to be some optimal level of material well being – once upon a time I earned less, but was happier. now maybe that’s because me and my wife don’t know how to spend the money, maybe its because I am older, don’t ask me.

    Some more doubts: maybe a high score in the happiness metric means that the Danes are a bit conformist; maybe they just don’t admit at being unhappy because things are ‘all right’. No way to know that.

    I think that happiness is hard to measure, it’s not a tangible thing like say income; but a higher level of education helps: one is free to look at the bright side of life, and does not have to measure everything in terms of the money metric.

  11. All those Americans driving new cars have huge credit card debts, are underwater on their mortgages, and don’t save anything. So is that a sign of wealth?There is no way everybody in California can afford a late model BMW, but nobody seems to drive anything less expensive. The same is now true of DC, but it didn’t use to be like that . . . the 5-year old Honda Accord has been replaced by the Lexus SUV as the modal vehicle of the DC suburbs.

  12. “You will never get the kind of service in a restaurant that you expect in the U.S. because the waitstaff aren’t working for tips.”

    … as compared to Japan, where you get far better service than at a restaurant in the U.S. and the waitstaff don’t get *any* tips. Ditto taxis. Sorry, tipping is just a dysfunctional American habit, not an effective way of getting good service. (My guess is that level of service is at least partially a cultural thing, and Japan has a long history customers expecting very high quality service, even if it pushes prices up somewhat.)

  13. It’s interesting that in Denmark everyone tries to avoid paid human labor as much as possible. It’s a contrast with China, where they hire way too many service people in the supermarkets, which means that basically the supermarkets are paying them to chat with each other all day. Or a contrast with the US in the 1950’s, where a whole pit crew would check the air in your tires and your oil level while filling your gas and wiping your windshield.

  14. Danish GDP per capita is 80% of US GDP per capita
    http://www.forbes.com/lists/2011/6/best-countries-11_land.html (Denmark at 5, the US at 10). GDP per capita is only an indicator of material well being. Most americans could probably move to New Zealand or Canada without missing the comforts of home terribly – even if the GDP per capita is lower there.

    Most scandinavians love IKEA-products. They’re inexpensive and simple.
    What they do not like are long working long hours. They know that almost everywhere in the world the work you do will mostly benefit the gubbermint and/or the top 1% of the company you work for. So you might as well work less and live a bit more. Meet with friends. Have a good time. Eat less medicine.

    Wikipedia has a list of danish brands
    http://en.wikipedia.org/wiki/Category:Danish_brands
    It looks as if Denmark is doing almost as well as, perhaps, Maine.

    They do manage to sell some beers.

  15. Steven: I didn’t mean to equate GDP or material goods with well-being. As noted in some other posts, the lack of bicycle infrastructure in the U.S. means that people will drive a car instead of biking and/or have an accident on their bike and require medical treatment. Those things boost GDP without benefiting Americans. Similarly, American spending on all kinds of security boosts our GDP without making us better off than people in a country where the real and/or perceived security risks are lower.

    [And, by the way, my apartment in Harvard Square is about 70 percent IKEA!]

  16. Philg:

    You’ve mentioned a few times your admiration for low-tax Sinagapore. I think that you need to spend a week or so there and then write a nice long blog post comparing it to the US and Denmark.

  17. (Danes do a huge amount of cycling but helmet use is uncommon compared to the U.S.).

    I just came back from Boston and wanted to get a day or week pass for Boston’s bike share program, but my friends were horrified, perhaps justifiably, at the thought of riding around without a helmet. I thought that research had shown mortality and morbidity to be about equal in the U.S. for helmet and non-helmet wearers, but based on a few minutes of searching it appears that I was wrong and my friends right.

    Philg, have you read Stumbling on Happiness? It reinforces some of the points you make above.

  18. Whether to wear a helmet depends quite a bit on where and how you’re going to be bicycling
    http://en.wikipedia.org/wiki/Bicycle_helmet#Legislation_and_culture
    This is a classic video from an opponent of helmet laws
    http://www.youtube.com/watch?v=07o-TASvIxY (and yes, there is a blog for that, too: http://www.copenhagenize.com/ )

    Personally I wear one when going fast on (mostly empty) country roads on my carbon fibre bicycle. For shorter and slower trips I do not wear one.

    Stumbling on happiness (yes, there’s also a Tedtalk http://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy.html and a blog http://www.randomhouse.com/kvpa/gilbert/blog/ for that ) is a most excellent book. And probably holds the secret to danish happiness. There’s no real difference between real happiness (getting what you want) and synthetic happiness (being happy about what you get). If you ambitions turns you into a monster, you suffer. If your lead a simple life with average friends and average ambitions, you benefit.

    And well, the old Time magazine article on happiness
    http://philip.greenspun.com/materialism/early-retirement/
    is rather spot on.

    A few weeks ago I thanked a mentor (in person, not in detail, I’m afraid). And even such a simple act really made me happier.

    Maybe the danes are just a little bit better at following the steps outlined in the Time article.

  19. Two different approaches to turning 50. One man feels real unhappiness. The other is high on synthetic happiness

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