Finland has remained the happiest country in the world for the seventh year a row with nordic neighbors Sweden, Denmark and Iceland also retaining their places in the top 10, according to the annual World Happiness Report published on Wednesday.

But rising unhapiness especially among young people has seen other Western countries drop down the UN-sponsored index, with the United States and Germany dropping out of the top 20 for the first time since the report's first edition more than a decade ago.

Taking their place were Costa Rica and Kuwait at 12 and 13 respectively, while Eastern European countries Serbia, Bulgaria and Latvia reported the biggest increases in happiness.

Afghanistan, plagued by a humanitarian catastrophe since the Taliban regained control in 2020, remained in last place.

The survey asks people in 143 countries and territories to evaluate their life on a scale from zero to 10, taking into account factors such as GDP per capita, social support, healthy life expectancy, freedom, generosity and corruption.

Its release coincides with the International Day of Happiness on March 20.

Earlier unhappiness a trend in parts of West

Previous research into well being often found happiness to be highest in childhood and early teens, before falling in middle age and then rising again upon retirement.

But the report found that in some countries, today's younger generations were more likely than older age groups to report loneliness.

"Youth, especially in North America, are experiencing a mid-life crisis today," said University of Oxford economics professor and report editor Jan-Emmanuel De Neve.

He associated the increasing unhappiness among western youth with a range of factors including the negative aspects of social media, increased polarisation over social issues, and economic inequality that made it harder for young people to afford their own homes than in the past.

Why is Finland so happy?

But not in Finland where, according to Jennifer De Paola, a happiness researcher at the University of Helsinki, a close connection to nature and healthy work-life balance contribute to world-leading happiness ratings.

"Finnish society is permeated by a sense of trust, freedom, and high level of autonomy," she said, adding that Finns' strong welfare society, trust in state authorities, low levels of corruption and free healthcare and education were also key.

What's more, she believes Finns have a "more attainable understanding of what a successful life is," compared to places like the United States where success is often equated with financial gain