While high education levels had a positive effect on happiness levels overall, Australia was an exception, the report said.
The report was prepared by the Sustainable Development Solutions Network, an international panel of social scientists convened by the United Nations. It was edited by Helliwell; Jeffrey D. Sachs, a Columbia University economist; and Richard Layard, of the London School of Economics.
The ranking is based on answers to a simple life evaluation question developed decades ago by a social scientist and posed to people around the world between 2014 and 2016 by Gallup, the polling organisation:
"Please imagine a ladder, with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?"
Humanity is about halfway up the ladder, with an average global score of 5.3, based on hundreds of thousands of surveys conducted by Gallup over those years. The top five countries - Norway, Denmark, Iceland, Switzerland and Finland - all have scores just above or below 7.5. The Central African Republic's score is nearly 2.7.
The authors found that three-quarters of the variation among countries can be explained by six economic and social factors: gross domestic product per capita (a basic measure of national wealth); healthy years of life expectancy; social support (having someone to rely on during times of trouble); trust (a perceived absence of corruption in government and business); the perceived freedom to make life choices; and generosity (measured by donations).
Still, there are outliers.
In Latin America, life evaluations are about 0.6 points higher on average than would otherwise be predicted by those indicators. East Asian countries have the opposite problem, reporting less happiness than would be expected based on those factors. In both cases, the authors credit, at least in part, cultural differences.
Still, they argue that those six factors explain much of the variation in happiness around the world - and that nations ignore the social factors at their own peril.
Take the United States, which ranked 14th this year. Despite gains in per capita income and healthy years of life expectancy, happiness in the United States declined 0.51 points between the two-year periods ending in 2007 and 2016, they found.
"We're getting richer, but our social capital is deteriorating," Sachs said.
Social support, trust, perceived freedom and generosity all suppress happiness in the US. And to offset that drag economically, gross domestic product per capita would have to rise from about $US53,000 ($A68,000) to $US133,000, he argues.
"The country is mired in a roiling social crisis that is getting worse," he wrote in a chapter dedicated to America's flagging happiness. "Yet the dominant political discourse is all about raising the rate of economic growth."
To fix that social fraying, Sachs argues policymakers should work toward campaign finance reform, reducing income and wealth inequality, improving social relations between native-born and immigrant populations, overcoming the national culture of fear induced by the Sept. 11 attacks, and improving the educational system.
The world's 20 happiest countries
1. Norway (7.537)
2. Denmark (7.522)
3. Iceland (7.504)
4. Switzerland (7.494)
5. Finland (7.469)
6. Netherlands (7.377)
7. Canada (7.316)
8. New Zealand (7.314)
9. Australia (7.284)
10. Sweden (7.284)
11. Israel (7.213)
12. Costa Rica (7.079)
13. Austria (7.006)
14. United States (6.993)
15. Ireland (6.977)
16. Germany (6.951)
17. Belgium (6.891)
18. Luxembourg (6.863)
19. United Kingdom (6.714)
20. Chile (6.652)
The world's 10 least happy countries
146. Yemen (3.59)
147. South Sudan (3.59)
148. Liberia (3.53)
149. Guinea (3.51)
150. Togo (3.49)
151. Rwanda (3.47)
152. Syria (3.46)
153. Tanzania (3.35)
154. Burundi (2.91)
155. Central African Republic (2.69)