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Australia has dropped out of the world's top 10 happiest countries, ranking 11th in the latest World Happiness Report. Meanwhile, New Zealand follows closely behind in 12th place, trailing nations such as Israel, Mexico, and several Nordic countries.

The yearly report, released in 2025, was based on data collected from 2022 to 2024 and measured happiness using a single question called the Cantril Ladder.

The survey was conducted with the help of Gallup and the UN Sustainable Development Solutions Network.

Over 100,000 people from 140 countries participated in the survey, during which they were asked to imagine a ladder, where 10 represented the best possible life and 0 represented the worst. They then rate their own lives on this scale.

The same survey was criticized by academics last year, arguing that the question made people focus too much on power and wealth, as per The Guardian.

Finland remains the happiest country

Finland has been named the happiest country in the world for the eighth year in a row. Other Nordic countries, including Denmark, Iceland, Sweden, and Norway, also ranked among the happiest nations. The top 10 happiest countries in 2025 are:

  • Finland
  • Denmark
  • Iceland
  • Sweden
  • The Netherlands
  • Costa Rica
  • Norway
  • Israel
  • Luxembourg
  • Mexico

Despite the ongoing conflict with Hamas, Israel ranked 8th. Costa Rica and Mexico entered the top 10 for the first time, taking the 6th and 10th spots. Australia, which was in the top 10 last year, dropped to 11th place in 2025. Switzerland also fell out of the top 10.

Happiness declines in the U.S. and U.K.; Afghanistan remains the unhappiest

The United States has dropped to its lowest ranking ever, now at 24th place. It previously reached its highest position at 11th in 2012. The United Kingdom is now ranked 23rd, marking its lowest happiness level since the 2017 report.

Afghanistan remains the unhappiest country in the world. Afghan women, who face strict restrictions under Taliban rule, report especially difficult lives. Sierra Leone, in West Africa, is the second unhappiest country, followed by Lebanon at third from the bottom.

While Israel is among the top 10 happiest countries, the State of Palestine ranks much lower at 108th.

Social connections and trust

Researchers found that eating meals with others, having a reliable support system, and living in larger households contributed to higher happiness levels. In places like Mexico and Europe, households with four to five members tend to report the highest happiness.

Trust in others also plays a bigger role in happiness than previously believed. For example, the study found that people who think someone would return their lost wallet tend to live in happier societies.

Nordic countries ranked among the top places where people expect -- and actually experience -- the return of lost wallets.

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