(MONEY Magazine) – Before we retreated from Vietnam, suffered through the 1970s oil shock and got used to walking past homeless people on our city streets, John Wayne reigned as the archetypal American -- riding high in the saddle, secure that his homeland was first among nations and confident that it would stay that way forever. But nowadays, even after the triumph of Operation Desert Storm, the personification of America often seems less like the Duke and more like Woody Allen -- a self-doubting neurotic, fretful about America's place in the world and increasingly pessimistic about our children's chances of living better than we do today. The findings of poll after poll confirm that gnawing sense of insecurity. For example, a nationwide survey of 300 MONEY subscribers conducted last April by the Gallup Organization disclosed this: while 74% of the respondents felt that America's standard of living was still pre-eminent, a full 16% said they thought the U.S. would tumble from the top within 10 years; another 17% said they weren't sure whether we could retain our claim to No. 1. When the questioning turned to which nation was likeliest to replace us at the pinnacle, Japan was cited by 77%, followed by Germany (63%). (The survey's margin of error was plus or minus six percentage points.) Those concerns often seem justified. Hardly a week passes without new evidence that other people live better than we do. As recently as July, the Council on Competitiveness, a nonprofit organization of 150 U.S. chief executives, reported that America's standard of living, measured by the widely used yardstick of per capita gross domestic product, fell slightly in 1990. Per capita GDP also grew more slowly in the U.S. from 1972 through 1990 -- up an inflation-adjusted 33% -- than it did in six of our main economic rivals, led by Japan (up 80%). That news seems more disturbing than it actually is, however, because per capita GDP tells little about how well a nation's citizens live or how much their income buys. To answer those questions and find out who in the world lives best overall, MONEY reporters spent eight months preparing this 50-page special report. They interviewed more than 200 government officials, scholars and ordinary citizens and traveled some 19,000 miles from New York City to Yokohama, Japan and back. We also constructed a proprietary standard-of-living index with the help of contributing editor Cheryl Russell, a noted demographer and the author of 100 Predictions for the Baby Boom (Plenum, $17.95). In designing the index, we consulted national opinion surveys to identify nine critical elements that Americans believe are essential to maintaining a high standard of living. Among them: decent health care and a home you own. Then, using the latest available statistics, we compared the U.S. in each of the nine key areas against 15 industrialized democracies (with at least 5 million residents) that the World Bank and the United Nations consider to have the world's wealthiest economies. (These criteria obviously ruled out the impoverished Soviet Union and China.) For Americans, the results are immensely reassuring. Not only does the U.S. still enjoy the world's highest standard of living, it far outshines its major economic competitors, seventh-rated Japan and eighth-place Germany. Reunited Germany would rank even lower if available statistics reflected former East Germany's distressed living conditions. (For details on our methodology, see page 93.) Admittedly, the MONEY index rests on how Americans define the good life. We make no apologies for that; obviously, cultures with different values might reach other conclusions. The remainder of this article examines where the U.S. stands on nine measures of a lofty standard of living, ranked in their order of importance to Americans like you.

Health care Of the dozens of measures we could have chosen to compare health-care quality, we settled on an average of male and female life expectancy at birth and at age 60 as a reasonable approximation of a nation's overall health. The U.S.' eighth-place finish ties it with Austria, Canada, Denmark and Italy. That standing is perhaps surprisingly high given that an estimated 34 million Americans, or 14% of our population, lack medical insurance. (By contrast, the 15 other countries guarantee virtually cradle-to-grave access to health care.) Our uninsured -- largely the working poor -- are the clear losers in a medical system that ranks as the most high-tech and high-cost in the world. As if further evidence were needed, a study published last January by the Center for Health Policy Studies at Georgetown University found that uninsured patients were 1.2 to 3.2 times more likely to die during a hospital stay than were those with private insurance. Japan, which in 1950 had the lowest life expectancy of the countries we studied, now tops the list with an average at birth of 78 years and an average at age 60 of 22 years. Remarkably, Japan spends only 6.7% of its GDP on medicine while the U.S. lays out 11.8%. Yet the Japanese visit doctors almost three times as often as we do (13 times a year vs. five). Japan's Ministry of Health and Welfare, in consultation with an advisory body of citizens, insurers and health-care providers, keeps a relatively tight lid on health- care costs by fixing prices that private physicians can charge. As a result, an appendectomy costs only $1,413 in Japan, compared with an average of $8,350 in New York City.

Job opportunities Based on the average annual unemployment rate during the 1980s, the U.S. finished sixth in our index with a 7.2% mark. Best at keeping its people at work was tiny Switzerland (pop. 6.6 million), which posted 0.7% unemployment during the past decade. The Swiss secret: more jobs than native workers. Consequently, a quarter of the 3.6-million-person Swiss labor force is foreign; one in five of those is a so-called frontier worker, who commutes to his job from neighboring countries. When jobs disappear, so do many foreign workers. As for other nations with low unemployment, Sweden owes its 2.2% average rate partly to government- and employer-sponsored retraining programs for laid-off workers. The government also gives grants that can total thousands of dollars to workers who relocate to find new jobs. Japan posted its enviable 2.5% unemployment rate in the 1980s in large part because of its robust economy, but also because many young, old or female workers who lose jobs return to their families, don't apply for unemployment compensation and don't even begin to look for work again until employment becomes readily available.

Housing When we examined home ownership rates and dwelling sizes, the U.S. finished third. Our 64% home ownership rate is impressive, but it still places the U.S. below the first-place 69% mark shared by Australia and Finland. In those countries, first-time home buyers and others enjoy numerous generous government subsidies and loan programs that aid affordability. The picture isn't nearly so bright in Japan and Germany. The fact that 61% of Japanese households own their homes is remarkable, considering that even cramped quarters that lack central heating cost hundreds of thousands or even millions of dollars (see page 105). The Japanese government has so far managed to prop up the home ownership rate by providing reduced-cost construction loans (now 5.5% to 6.7%) to people who plan to build single-family houses with floor space of 753 to 2,368 square feet. Prospective buyers are also able to amass substantial down payments because many major corporations house young employees in subsidized dormitories or rental apartments. In Germany, where only 39% of all householders are homeowners, the problem is housing availability, particularly in prosperous western cities that are attracting job-seeking settlers from the former East Germany as well as ethnic Germans from economically strapped Poland and the Soviet Union. Indeed, there are 95 households vying for every 100 housing units in the former West Germany; in the U.S., there are only 84 for every 100. To gauge the quality of a nation's housing stock, we compared dwelling sizes by examining the percentages of units with five or more rooms. In general, houses are largest in countries with lots of land, like Canada (72%), Australia (66%) and the U.S. (64%). Space is tightest in the Netherlands, where only 8% of all dwellings have at least five rooms.

Income and purchasing power Because a prospering middle class is a hallmark of a high overall standard of living, we examined the percentage of total household income that goes to the middle 60% of the population. With the middle class controlling 53% of all income, the U.S. ties with Australia, France and Spain for eleventh place. Austria, Belgium, Denmark and Finland top the list with 56%. Germany, the Netherlands, Sweden and the United Kingdom are close behind at 55%; France and Japan tie with 54%. The disadvantaged are best off in Japan, where the poorest 20% of the population receive 9% of all income. By contrast, the bottom fifth of the population in the U.S., Canada, Denmark and Switzerland gets only 5% of all income. Since a fat income doesn't mean much if it doesn't buy much, we also measured purchasing power by calculating the share of total spending that people devote to food and beverages. The less spent on food, the more income left over for luxuries. Americans spend only 19% of their money on sustenance and finish second to the Netherlands (17%), the third biggest producer of pigs, butter and potatoes in the 12-member European Community. Grocery shoppers are considerably more squeezed in fourteenth-place Japan, where citizens devote a steep 26% of their spending to food. Mountainous Japan is poorly suited to agriculture (only 13% of its land is arable), yet it slaps stiff tariffs averaging 12.1% on imported foods to protect its politically powerful farmers.

Upward mobility Since a college education is now a prerequisite for financial success in developed countries, we measured the potential for upward mobility by comparing the percentage of 20- to 24-year-olds enrolled in college and other post-secondary schools. The U.S., which sends 60% of its kids on to higher education, finishes second to Canada (62%). Germany and Japan weigh in at 32% and 30%, respectively; both of them use tough college entrance examinations to steer all but the most academically gifted students to vocational training. In the U.S., by contrast, even Bart Simpson would be able to find a college to admit him. Whether this is good or bad is hotly debated. Some Americans contend that admitting Bart-like ne'er-do-nothings drags our universities down to the level of other countries' secondary schools. Others argue, however, that easy access to education increases the odds that at least some Barts will eventually take learning seriously and flower into productive citizens. Our open system explains, in part, why U.S. students always look so dumb on international tests. Because foreign students' future earning power frequently depends on how well they do on tests, they tend to take them more seriously than Americans do. At a juku, or cram school, in Yokohama that MONEY's reporters visited one Saturday afternoon, junior high school students were memorizing written descriptions of how to perform gymnastic stunts for the physical education section of entrance exams that Japanese students must take to get into topflight high schools. We also measured opportunities for women by comparing the percentage of female college students in each country. Once again, the U.S. shines: our 51% mark ties us with Australia, Finland and Spain for third place behind Canada and France (both 54%). In sharp contrast, Germany and Japan posted scores of 38% and 26%, respectively. Unsurprisingly, German and Japanese women are also less likely than American women to find good jobs. Twenty-nine percent of U.S. working women hold professional, technical, administrative or managerial positions, vs. 18% in Germany and a mere 12% in Japan.

Leisure The MONEY subscribers we polled were convinced that the U.S. had become a land of lazy loafers: only 7% of those surveyed thought that the amount of leisure time we enjoy would put us in the bottom third of the nations we studied. But that's where we fall. We spend an average of 39 hours a week at work, more than Australians, Canadians, Swedes (38 hours), Austrians, Britons (37), Danes (35) and the Dutch (34). We are also tied with Canada and Japan for the dubious distinction of receiving the least vacation time -- 10 days a year on average (not counting national holidays). Even the workaholic Japanese, who toil an average of 47 hours a week, enjoy 14 paid national holidays each year while we get just 10.

Wheels Although Japan has overtaken the U.S. as the world's most prolific automobile manufacturer, you wouldn't guess it by the country's low rate of car ownership. Japan ranks dead last on our 16-country list, with only 2.4 cars for every 10 of its people. Laws prohibit residents of densely populated areas like Tokyo and its suburbs from buying a car unless they can prove they have a parking space for it. Maintaining a car there is also expensive. Vehicles that are more than three years old must undergo rigorous inspections every two years. Minimum cost of such a checkup in greater Tokyo: $1,600. As anyone who navigates rush-hour traffic in an American city probably suspects, we own more cars than anyone else -- 5.6 for every 10 people. Germany, which is the world's third biggest car manufacturer, finishes third (4.6).

Safety Most quality-of-life factors, such as climate, geography and social life, are highly subjective. But one such indicator isn't debatable: everybody wants to feel safe in his or her own neighborhood. Unfortunately, America's reputation as the world's crime capital is well deserved. Our annual murder rate of 8.4 per 100,000 inhabitants is more than 1.5 times greater than runner-up Canada's 5.5. Our pilferage score is somewhat less embarrassing: with 5,248 thefts per 100,000 inhabitants, we rank sixth, behind Denmark (8,525) and Sweden (7,630), two welfare states renowned for their relative lack of poverty. The Danes and Swedes are as blase about thievery as they reputedly are about sex. Echoing the comments of a Swedish law enforcement official whom MONEY interviewed, Finn Ravnborg, deputy chief constable of the National Commissioner of the Danish Police, explained: ''When people use someone else's bicycle or motorcycle briefly, then leave it somewhere, it's not the same as stealing. It's reported as a theft, but we really consider it to be borrowing.'' The safest industrialized nation by far is Japan, with a murder rate of 1.2 per 100,000 inhabitants and a theft rate of 1,160. In Tokyo, $50 earrings lie loose all day on department store countertops, and strollers leave their briefcases and shopping bags unattended on park benches. In addition to its emphasis on conformity and social harmony, Japan's low crime rate can be traced to its strict control of weapons, which began in the 16th century when dictator Hideyoshi confiscated swords from all but the samurai. In today's Japan, crime is a high-risk occupation: Japanese police arrest suspects in 79% of all robberies. American cops crack only 25% of such cases.

Luxuries As frivolous as it may seem, living well means you can afford a few creature comforts after you've paid for food, shelter and transportation. Since color televisions, once considered costly indulgences, are now commonplace in all affluent nations, we chose VCR-ownership rates as our proxy for luxury. Sixty- two percent of U.S. households own a VCR, which puts us in third place, close behind Canada (65%) and Australia (66%). Japan, the world's biggest manufacturer of VCRs, comes in fifth (55%). One measure of a nation's standard of living that our index doesn't take into account is nevertheless worth noting: the opinion of people who vote with their feet. During the 1980s, about 6 million immigrants came to the U.S. That was more than in any decade since the peak years between 1900 and 1910. Like their predecessors (see Editor's Notes on page 4), today's immigrants come because the U.S. promises a better life. Contrary to the fears of some natives, immigrants help raise, not lower, our standard of living by expanding our labor force and consumer markets. Indeed, immigrants even make us more competitive globally. Says Ben Wattenberg, the author of The First Universal Nation (Free Press, $22.95): ''Korean and Mexican Americans will learn their native languages at home and English at school and grow up to sell IBM products in Korea and Mexico.'' By contrast, our much more homogeneous Japanese and European rivals will have a tough time enlarging their work forces or markets unless they can convince their residents to have more kids -- or can discover a way to reverse aging. (For more on our index, see page 93.)

BOX:

AMERICA REMAINS THE LAND OF OPPORTUNITY: 6 MILLION IMMIGRANTS SETTLED HERE IN THE 1980s -- THE LARGEST TOTAL SINCE 1900-10

AFTER CANADA (62%), THE U.S. SENDS MORE OF ITS YOUNG ADULTS TO COLLEGE (60%) THAN ANY OF THE 14 OTHER NATIONS WE EXAMINED

TODAY'S JAPANESE NEWBORNS CAN EXPECT THE LONGEST LIVES, 78 YEARS; U.S. BABIES, 75 YEARS

ONLY 8% OF ALL DUTCH DWELLINGS HAVE FIVE OR MORE ROOMS; THE COMPARABLE U.S. FIGURE IS 64%

FEWER THAN 33% OF THE SWISS OWN THEIR HOMES, VS. 69% IN AUSTRALIA AND FINLAND

BY LAW, AUSTRIANS, DANES AND SWEDES GET 30 VACATION DAYS PER YEAR; CUSTOMARILY, AMERICANS GET ONLY 10 DAYS

AMERICANS HAVE MORE CARS (5.6 FOR EVERY 10 PEOPLE) THAN ANYONE IN THE WORLD; AMONG THE NATIONS WE STUDIED, THE JAPANESE HAVE THE FEWEST

THE JAPANESE WORK AN AVERAGE OF 47 HOURS A WEEK, EIGHT HOURS MORE THAN AMERICANS UNEMPLOYMENT AVERAGED 10% OR MORE A YEAR DURING THE 1980s IN BELGIUM, ITALY, SPAIN AND THE UNITED KINGDOM

SPANIARDS SPEND 30% OF THEIR MONEY ON FOOD AND BEVERAGES; AMERICANS LAY OUT ONLY 19%

FEWER THAN A QUARTER OF 20- TO 24-YEAR-OLDS IN THE UNITED KINGDOM ATTEND COLLEGE

AMERICANS ARE 12 TIMES MORE LIKELY TO BE MURDERED THAN ARE FINNS

FEWER THAN A THIRD OF ALL HOUSEHOLDS IN FRANCE AND ITALY OWN VCRs, VS. 62% IN THE U.S.

THE JAPANESE VISIT DOCTORS ALMOST THREE TIMES AS OFTEN AS WE DO (13 TIMES A YEAR VS. FIVE)

SWEDEN GIVES GENEROUS GRANTS TO WORKERS WHO RELOCATE

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: WE'RE NO. 1 The U.S. ranks first -- with 820 (or 79%) out of a possible 1,040 points -- on our exclusive index rating the standard of living in 16 wealthy nations.

CHART: NOT AVAILABLE CREDIT: Source: International Labour Office CAPTION: WHERE JOBS ARE PLENTIFUL ( After a bout of nearly double-digit unemployment in the early 1980s, the U.S. jobless rate settled well below 7% during the latter part of the decade. Unemployment is virtually unknown in prosperous Switzerland. It was endemic in Spain's sluggish economy during the 1980s, however, reaching a high of 21.6% in 1985.

CHART: NOT AVAILABLE CREDIT:Source: 1991 Britannica World Data CAPTION: WHERE THEY OWN THEIR OWN HOMES Owning a home isn't just a part of the American dream. The percentage of households that own their homes tops 50% in 11 of the 16 industrialized coun tries we studied. The U.S. rate, though lifted by the income tax deduction Americans get on mortgage interest, trails that of Australia and Finland, where the government offers cash sub sidies to home buyers and builders.

CHART: NOT AVAILABLE CREDIT: Source: World Bank/World Development Report 1991 CAPTION: WHO SENDS THE MOST KIDS TO COLLEGE Canada and the U.S. strongly encourage higher education. By contrast, European countries, plus Japan and Australia, restrict college admissions to students who rank among the top quarter or third on standard measures of academic achievement. The table shows the percentage of 20- to 24-year-olds enrolled in universities, two-year community colleges and other post-secondary schools.

CHART: NOT AVAILABLE CREDIT: Source: Hewitt Associates; Consulate General of Italy CAPTION: THEY GET VACATIONS . . . The world's most generous vacation benefits are found largely in Europe. Only the U.S. and the U.K. have no laws mandating minimum vacation days. The list shows the legally required minimum number of vacation days for employees with one year of service (six months in Germany).

CHART: NOT AVAILABLE CREDIT:Source: Organisation for Economic Co-operation and Development CAPTION: . . . WE GET AROUND Whether it's a U.S-made little deuce coupe or the latest luxury import, Americans love their cars. The U.S. has far and away more passenger cars per 1,000 inhabitants than most major industrialized countries. Japan, the world's leading car manufacturer, trails the list.