SYDNEY—Australia is living up to its nickname of "the lucky country," with a new survey marking it as the happiest industrialized nation in the world based on criteria such as jobs, income and health.
Having sidestepped the economic malaise gripping much of Europe and with near-full employment owing to a once-in-a-century resources boom, Australia has come out on top ahead of Norway and the U.S. in the annual Better Life Index compiled by the Organization for Economic Cooperation and Development.
The findings come despite fresh signs that not every Australian is enjoying the benefits of the resources boom, with tourist attractions seeing a drop in visitors and many manufacturers rethinking their Australian operations because the strong local currency has made exports uncompetitive. A rising cost of living also is weighing heavily on consumers, who are tightening their purse strings or using the Internet to hunt for bargains on items that can be purchased overseas.
European Pressphoto Agency
But the promise of higher living standards is drawing migrants from across the world. Davide Mazurek, 22 years old, moved from Tuscany, Italy, to Australia six months ago and is in no hurry to return. Having worked as a farmhand in Victoria state, Mr. Mazurek next plans to pitch his tent in the remote northern city of Darwin, a frontier in Australia's energy boom.
"I don't want to go back to Italy now with the euro crisis. I like Australia, it's better here, the wages are better," he said.
But he admits that he finds Australia's cost of living pricey and that is eroding his efforts to save money. "The rents are expensive," he said.
The OECD survey—which rates its 34 member countries on categories like housing, jobs, education, health, environment and work-life balance—shies away from explicitly giving any one nation an overall top ranking, but if each of the 11 categories is given equal weight, Australia's cumulative rank rises to No. 1, according to the OECD website. It is followed closely by Norway and the U.S.
Australia's high rank—based on data from the United Nations, individual governments and other sources—is largely due to its strong economic performance despite the economic turmoil in Europe and anemic growth in the U.S.
Strong demand for iron ore and coal exports means Australia's unemployment rate was 4.9% in April, compared with 10.9% in the euro zone and 8.1% in the U.S. More than 72% of the working-age population in the country is employed, compared with the OECD average of 66%.
Unlike many of its developed peers, Australia's government plans to return to a budget surplus in the next fiscal year and forecasts its net debt to peak just below 10% of GDP, a fraction of the borrowings seen elsewhere.
The Australian dollar has recently dipped below parity against the greenback, though it remains at historically high levels and is also strong against the euro and pound, giving shoppers fire power if they travel overseas.
But there are weaknesses, too. While the index found that Australians rank their satisfaction with life at 7.4 out of 10—higher than the OECD average of 6.7—they are noticeably less bullish in their day-to-day life, with 74% reporting positive daily experiences. That's less than Americans, Irish and even Spaniards facing job insecurity due to the country's hefty debt pile.
The reasoning for that is pinned on an Australian consumer that has become overly cautious, analysts say.
"Australian consumers have been almost as gloomy as their counterparts in the U.S. and Europe, notwithstanding the gulf between Australia's economic performance and that of most other 'advanced' economies," said Saul Eslake, an economist at Merrill Lynch.
Despite a minority government that's sinking in the polls after a series of scandals involving key lawmakers and policy missteps, some 71% of Australians trust their political institutions, compared with an OECD average of 56%.
In addition, 85% of people in Australia described their health as good, well above the OECD average of 70%. The survey also found that Australian men spend nearly three hours every day cooking, cleaning or caring—one of the highest scores across the OECD's 34 member countries and ahead of men in the U.S., Germany and Canada.
Diala Ibrahim, 31, emigrated to Australia from Lebanon as a child. She and her fiancé now are mulling whether to move to London, where he is currently based, or to remain in Sydney. Her clear preference is for life Down Under because she finds the quality of living higher.
Australia's "environment is clean, there's no pollution, there's no war, there's law, there's order. You don't find that in all places," Ms. Ibrahim said.