What do wellbeing economy policies look like, and how effective are they in practice? Could Europe truly benefit from such approaches? Iceland, a country renowned for its dramatic landscapes, is also a leader in equity and social progress. It has embraced a wellbeing economy, and, through its innovative Children’s Prosperity Act, Iceland is showing the real potential of wellbeing-focused policies to shape the future of child welfare. Jenný Ingudóttir from the Directorate of Health in Iceland discusses its impact.
In the lead up to the creation of the Children‘s Prosperity Act–legislation aimed at improving children‘s lives by making sure families get the support they need early on–an economic evaluation revealed the estimated high societal costs of adverse childhood experiences (ACEs). This marked a significant moment, not just for Iceland, but potentially for child welfare across Europe, as the economic impact of ACEs had not been quantified before.
Despite it being a rather unusual undertaking to make an economic impact assessment for a parliamentary bill of this nature, this legislation was not merely about funding services; it was created to ensure that all children receive the right support, at the right time, and from the right provider. And because of this approach, the results were striking.
What stood out from the evaluation was that the long-term economic returns of the Prosperity Act were more than just promising. The projected costs for the Act would be surpassed by the benefits as early as 2035, with positive economic returns anticipated by 2050. This is a rare gem of a government initiative, as not only does it promise to be one of the more profitable projects that the government undertakes, but it does so without causing disruption to the environment.
Real-world policy implementation makes all the difference
The Act divides child wellbeing services into three levels: first-line services that include education, leisure activities, and primary healthcare; second-line services offering more individualised support; and a third level providing specialised support for more complex needs. Perhaps the most innovative thinking of this legislation is its structural, legal path approach ensuring cooperation between different service systems.
A fundamental feature of this Act is the appointment of special coordinators at the first-line services. These coordinators offer information and guidance on services, as well as facilitating access to further services when needed. At the secondary level, a dedicated case manager designs a support plan, provides access to services and follows up on implementation to ensure the child’s needs are met. This approach shows the importance of personalisation when it comes to child welfare. Its effects are already being felt, as one testimonial from one parent involved in the programme states:
“I think there’s something so beautiful about my son having his own case manager, whom both I and he can go to. I felt like I had been running uphill for 3 years, where I had to ask for a team meeting and fight for everything. I got warmth and joy in my heart when I was invited to a team meeting with my son by his case manager. I’m incredibly happy with this service and this new law”.
Such feedback is a reminder of the emotional and practical benefits of a system designed not only to deliver services but to make families feel seen, heard, and, crucially, supported. Much like many aspects of health and social care, wellbeing cannot be measured solely in economic terms.
How the Act is transforming the measurement of children’s wellbeing
But of course, it’s crucial to measure the impact of a revolutionary act such as this, which is why a specialised dashboard has been designed to monitor how this Act can influence children’s health and wellbeing. Based on around 100 indicators, the data is organised across five pillars that align with the general principles of the United Nations Convention on the Rights of the Child: education, quality of life, health and wellbeing, security and protection, and participation and social connection.
This data-driven approach, which includes data from the Icelandic Youth Survey as well as from other sources, has already revealed key trends. These include a notable decline in youth substance use and improved reporting of mental wellbeing in schools, enabling policymakers to track progress, support evidence-based policy decisions, and keep the Act responsive to real community needs.
Child wellbeing needs more than quick fixes
While economics often dominate the debate, the real test of a wellbeing approach lies in how policies work on the ground. The implementation of Iceland’s Children’s Prosperity Act is well underway, a process that began in 2018 and came into full effect in January 2022, with rollout continuing through to 2026. The creation of the Act hasn’t been a solo mission. Developing such a complex policy has required input from a wide range of sectors, with agencies like the National Agency for Children and Families playing a pioneering role. The Agency’s involvement highlights the importance of cross-sector collaboration in policymaking and delivery.
Take, for example, the implementation of such an Act. It’s a complex and far-reaching process involving many stakeholders at multiple levels. One strong example of cross-sector collaboration is the partnership between the National Agency for Children and Families and the Directorate of Health. Together, they created an interactive online checklist for health promoting schools, encouraging a more systemic and holistic approach to child wellbeing.
As implementation continues, ongoing reforms and related legislative amendments are being made. But more importantly, the Children’s Prosperity Act offers a new pathway for transforming how we, as health and social professionals, governments, and the public, think about and approach child welfare.
Why real change depends on working together
Of course, challenges still present themselves. Coordination between service providers and involving everyone working with children is not an easy task and takes time. But the evidence speaks for itself.
Early reports from the implementation of the Act show a marked reduction in service duplication, greater access to early intervention, and higher satisfaction from both families and those working on the front lines. The benefits clearly outweigh the costs. This model stands as a beacon of possibility, showing that comprehensive, well-designed social policies can yield long-term gains, not only for individuals but for society.
After all, this isn’t just about economic return or future productivity. It’s about recognising that childhood has intrinsic value. Supporting the wellbeing of the next generation isn’t just a moral duty, it’s a value in and of itself.
Jenny Ingudottir
Jenny Ingudottir is a public health specialist at the Directorate of Health in Iceland and has been working on health promotion in the school setting and child and adolescent violence prevention. As well as a background in sociology and public health, Jenny has a diploma in positive psychology. She is part of the Nordic network about the child´s first 1000 days and is on the triennial Nordic Public Health Conference committee.