Earlier this year the Mercer Quality of Living survey revealed the best cities in the world for quality of living (congratulations Vienna). Largely dominated by European cities including Zurich, Munich, Dusseldorf and Geneva, new research has now followed to discover the European country with the best overall standard of living.
Compiled in a report titled Which Countries in Europe Offer The Best Standard of Living?, Glassdoor Economic Research measured the quality of living by using markers such as average wage, the cost of living essentials and purchasing power.
Noting that it’s not just about how much the average person can earn in each country, but how how far those earnings will stretch, Dr. Andrew Chamberlain, Glassdoor’s Chief Economist, writes in the report: “When it comes to compensation, a larger pay packet isn’t always better. What matters is the ability to afford useful things that enrich our lives.
“Average wages vary considerably from one country to another but the gap between take-home pay and price levels has more relevance to the man on the street. A low cost of living, as you would find in Greece and Portugal, doesn’t count for much if average wages and purchasing power are similarly low.”
So which European countries came out on top? Unsurprisingly, Switzerland and Denmark took first and second place respectively, both having been previously voted as the ‘happiest’ place to live in the world.
Germany came in at third place, Sweden at fourth, and the Netherlands completed the top five. Britain lagged behind at number 10, with the average wage ringing in at a reasonable €41,000 (£31,867), but some of the highest living costs across all of Europe, meaning that our money doesn't stretch all that far.
“What matters ultimately for standard of living is the gap between the take-home pay and price levels,” continues Dr. Chamberlain. “Taking together both the income (after income tax) and the price-level (including value-added taxes or VAT) information, it is possible to derive an indication of after-tax, local purchasing-power-based, ‘standard of living’.”
Here’s a run-down of what makes the top five so special…
In Switzerland, the average city-based worker can afford to buy around twice as much as his or her equivalent in New York City - US standards of living are used as benchmarks for comparison, to indicate what it above or below average.
Denmark may fall middle-tier when it comes to the average wage of its inhabitants, but the low cost of living - modestly priced local goods etc - means people are able to enjoy to more disposable income.
Despite average nominal wages in Germany being relatively low compared to other European countries, purchasing power for the average earner is still high.
Similarly, Sweden also sees lower average wages teamed with high purchasing power for its inhabitants, meaning pay packets stretch further.
Like Denmark, the average wage in the Netherlands falls in Europe’s middle-tier, but lower costs of living compared with other countries mean residents are onto a winner.