World Economy

Crisis takes its toll on euro zone well-being: OECD

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People across the developed world are less satisfied and more suspicious of their governments than they were before the financial crisis began, with the euro zone feeling worse than their U.S. counterparts, a new study by the Organization for Economic Cooperation and Development (OECD) found.

While average life satisfaction levels across the 34 member countries of the OECD have dipped slightly between 2011 and 2012, the overall score has stayed fairly level in the five years since the collapse of Lehman Brothers. However, individual countries showed wide differences in satisfaction levels. Between 2007 and 2012, the "How's Life?" report finds that average life satisfaction declined by more than 20 percent in Greece, 12 percent in Spain, and 10 percent in Italy, as the hardest-hit euro zone countries struggled with high unemployment and severe austerity measures.

Meanwhile, satisfaction levels fell slower in the U.S. declining by 7 percent in the four years to 2012. And Germany, Israel, Mexico, Russia and Sweden all saw increases in their satisfaction levels.

The think tank's assessment is based on 11 factors it considers being essential to well-being, from health and education to income and overall satisfaction with life.

(Read more: Almost 1 in 3 Europeans could be poor by 2025)

Citizens' trust in their governments and institutions has also been eroded, particularly in euro area countries where the percentage of people claiming to trust national government fell by 10 percentage points in the five years leading to 2012.

In the OECD countries as a whole, less than half of those surveyed said they trusted their governments, the lowest level recorded since 2006.

"This report is wake-up call to us all," said OECD Secretary-General Angel Gurría. "It is a reminder that the central purpose of economic policies is to improve people's lives. We need to rethink how to place people's needs at the heart of policy-making".

Across the 34 members of the OECD, real gross domestic product (GDP) per capita was 1 percent lower in 2012 than in 2007. However, household income was higher last year than its pre-crisis levels.

(Read more: Europe's austerity revolt forces easing on cuts)

Americans also fared better than Europeans in terms of income. U.S. GDP per capita was almost back to its pre-crisis level at the end of 2012 and household disposable incomes were 2 percent higher than in 2007. But in the euro zone, GDP per capita and household incomes were more than 4 percent lower, with Greece showing household disposable income down 10 percent in both 2010 and 2011.

Employment rates also show the difference between the U.S. and euro zone. Since 2011, employment rates have started to recover in America but declined in the euro area.

But the OECD also found that a number of European countries remain among the best places to live with Switzerland, the Nordic countries and the U.K. in the top 20 percent of countries, alongside Australia, Canada and New Zealand.

—By CNBC's Arjun Kharpal: Follow him on Twitter @ArjunKharpal