Finland topped the latest World Happiness Report, followed by Denmark, Norway, Iceland and Netherlands.
The report ranks countries on six key variables that support wellbeing: income, freedom, trust, healthy life expectancy, social support and generosity.
The annual report - compiled by the UN Sustainable Development Solutions Network - ranks 156 nations by "how happy their citizens perceive themselves to be".
Ranked at first place for the second time running, Finland's score was "significantly ahead of other countries in the top 10", the report said. South Korea was placed 54th, the position held in previous rankings by Japan. That's partly explained by "dramatic falls" in happiness in population dense countries like the United States, Egypt and India, it said.
Meanwhile, the USA fell all the way to 19th, dropping five positions from last year and nine spots total in the past two years.
Researchers say they have generated a recipe for a balanced life, not simply dependent on economic and material wealth.
As well as performing well on all the indicators, the most content countries all tended to have very stable societies, with happiness levels changing comparatively little since 2005.
Other conflict-ridden countries, such as Yemen, Afghanistan and the Central African Republic, also featured at the bottom of the table.
The United States fell one place from a year ago, ranking as only the 19th-happiest nation in the world despite being the wealthiest nation in the world.
"The U.S. has had, by now, two startling wake-up calls: back to back years of falling life expectancy and declining measured subjective well-being", wrote Jeffrey Sachs, economist and co-author of the report.