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

Sibel Eker and Leena Ilmola-Sheppard
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Sibel Eker: International Institute for Applied Systems Analysis (IIASA), Laxenburg 2361, Austria
Leena Ilmola-Sheppard: International Institute for Applied Systems Analysis (IIASA), Laxenburg 2361, Austria

Sustainability, 2020, vol. 12, issue 5, 1-19

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.

Keywords: well-being; systems thinking; causal loop diagrams; conceptual modelling; better life index (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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