Nordic people are at the top of their game. The World Happiness Report, published Wednesday, reveals Finland as the happiest place in the world, with Norway, Denmark, and Iceland following its lead.

The report, based on happiness levels for life expectancy, social support, freedom, trust, and generosity, shows one common link: the four top-ranking countries are all within the Nordic region. So why exactly are these countries so euphorically happy? It all boils down to the “Nordic model.”

Combining free market capitalism with a comprehensive welfare state and collective bargaining at the national level, the Nordic model offers a healthy, safe, and well-grounded lifestyle for Scandinavian countries. While Nordic countries pay some of the highest taxes in the world and have a lower GDP per capita than the U.S. — which only ranked 18th on the list — their free healthcare and education make up for it in the long run. Nordic people don’t mind the tax burden so long as it directly correlates to their overall well-being.

“We are the happiest because we are the most secure,” says Vassili Stroganov, a Danish writer at Delfinen Magazine. “There is a social safety net that protects us.”

They also have a high percentage of workers belonging to a labor union, shorter days in the office, and longer paid vacations, freeing up more time to actually enjoy life.

Norway
The fjord seas of Norway. 

The real reason this model works, however, is due to the level of trust they have placed on the system, primarily because of the small size of each of the countries and just how closely connected they are.

See also: “Best Places to Live: New Report Ranks Happiest Places on Earth”

The Nordic region is also one of the most socially progressive, with migrants’ overall happiness rating equal to that of the local natives.

“Perhaps the most striking finding of the whole report is that a ranking of countries according to the happiness of their immigrant populations is almost exactly the same as for the rest of the population,” the report says. The happiness of immigrants, according to Gallup data from 2005 to 2017, is not based on that of wealth, but rather a balanced range of features established through the Nordic model that lead to a more favorable quality of life. The natives’ willingness to accept migrants as one of their own is also a contributing factor to their contentment.

Denmark
Nyhavn canal in Copenhagen, Denmark

Journalist and best-selling author Michael Booth told Inverse in February 2016 that the reason these “nearly perfect people” are so, well, perfect — a concept by which the rest of the world is seemingly bewildered — is rooted in their need for a different way of life, and their lifestyle seemed to fit the bill.

“People would dream of moving and getting a house in Spain, France, or Italy. But after the Euro and global economic crisis in 2008, I think that dream disappeared for a lot of people. There was a need to look for somewhere with a different way or order and society — a little bit less commercialized, a little bit back to basics, with old-fashioned values of equality and morality,” said Booth.

Love ‘em or hate ‘em, any way you slice it, the Scandinavians are certainly doing something right.