Iceland has quietly surged in global happiness rankings, climbing from 18th place in 2008 to third in 2025 according to the World Happiness Report. While many developed countries are showing a decline in overall life satisfaction, Iceland has experienced a 9.1% increase. What’s fueling this upward trend in contentment? Icelanders credit their happiness to three key factors: proximity to nature, progressive social policies especially on gender equality and a unique cultural resilience born from living alongside an unpredictable environment.
A Deep Connection with Nature
One of Iceland’s greatest assets lies just outside every door: access to spectacular landscapes. From volcanic craters to black sand beaches, geothermal springs to snow-draped mountains, the outdoors is central to Icelandic life. “From home, from work, it’s very easy to get to a national park or open spaces,” says Hrund Gunnsteinsdóttir, author of InnSæi, a book exploring the Icelandic philosophy of intuition.
For expats like geologist Jessica Poteet, Iceland’s nature is a daily source of wonder. “I never take it for granted. Volcanoes, Northern Lights, and pink winter skies it’s like living in a dream.” Even during harsh winters, the locals embrace seasonal contrasts. Some employers even offer “Sun holidays” during rare bright days, encouraging employees to spend the day outdoors.
A Strong Safety Net and Gender Equity
Iceland’s social system reinforces a sense of security and fairness. Residents benefit from robust healthcare, unemployment support, and generous family leave. “During Covid, I lost my job and was supported until I found a new one,” says Brenna Elizabeth Scheving, an American living in Iceland. She also praised the country’s progressive parental leave 12 months shared between both parents regardless of gender, marriage status or whether a child is adopted.
Gender equality is deeply embedded in Icelandic society. The country has ranked first globally for closing the gender gap for 15 consecutive years. Women occupy top government positions, and the nation elected the world’s first female president in 1980. “I grew up never questioning whether a woman could be president,” says Gunnsteinsdóttir.
Social Stability and Community Trust
Iceland leads the world in measures of social support. Despite having fewer than 400,000 residents, it consistently scores high in community trust, generosity and personal freedom. This tight-knit society makes it easier for people to feel seen and supported, which is reflected in the country’s high ratings in the happiness index.
Even challenges, like high housing costs and tourism pressures, are met with collaboration. Reykjavík’s real estate prices have surged, in part due to a booming tourism industry. Yet most Icelanders acknowledge the economic benefits and they are actively managing the impact. Trails around new volcanoes are built within days. The Ring Road has been paved in full, improving access for both visitors and locals.
Tourism as a Tool for Sustainability
With tourism doubling since 2015, Iceland has pivoted toward responsible practices. Programmes like “Live Like an Icelander” at Hotel Ranga teach visitors about sustainability and tradition. At ION Hotels, female-majority staff models gender inclusivity in hospitality. Accommodations have expanded in number and quality, enriching the country’s cultural life. “I love seeing people out on the streets now,” says Gunnsteinsdóttir. “Reykjavík feels alive.”
Innsæi: The Icelandic Compass of Resilience
Perhaps the strongest foundation of Icelandic happiness lies in its mindset specifically, a cultural trait called innsæi, meaning “the sea within.” Gunnsteinsdóttir describes it as the ability to see from the inside out, guided by intuition and inner strength. It reflects how Icelanders adapt to life’s unpredictability, from erratic weather to volcanic eruptions.
“When you constantly feel the earth is shaking, it really reminds you that things can change quite rapidly,” she says. “When it comes to happiness, it encourages us to make the best out of what we have when things don’t go according to plan.”
A Model for Lasting Wellbeing
As many nations wrestle with declining happiness, Iceland’s approach stands as a model for modern wellbeing. By embracing nature, reinforcing equality, and fostering internal resilience, Icelanders have crafted a society that not only endures but flourishes. Their message to the world is clear: true happiness is built from the inside out, and it starts with community, care, and connection.
