Israel ranked 27th out of the 182 countries in the UN's Human Development Index, which measures quality of life and was published in Bangkok on Monday.
Israel dropped four places since the last report came out two years ago.
The index, which is compiled by the United Nations Development Program, provides a composite measure of three factors: life expectancy, education (measured by adult literacy and gross enrollment in educational institutions), and standard of living, measured by purchasing-power parity income.
Topping the list is Norway, followed by Australia and Iceland. At the bottom are Sierra Leone, Afghanistan and Niger.
Rounding up the top 10 were Canada, Ireland, the Netherlands, Sweden, France, Switzerland and Japan.
According to the index, which refers to the year 2007, Israel is 10th in life expectancy at birth at 80.7 years; 34th place in adult literacy, with a rate of 97.1%; 33rd in gross enrollment in education (89.9%) and 34th in Gross Domestic Product (GDP) per capita with an average of $26,315 in purchasing power.
Directly proceeding Israel, in 26th place, is South Korea, while Andorra follows at No. 28.
Israel's neighbors are all ranked lower than Israel, with Lebanon ranked 83, Jordan 96, Syria 107, and Egypt 123.
The Palestinian Authority, which in the index is referred to as the Occupied Palestinian Territories, is ranked in 110th place, with a life expectancy of 73.3 and adult literacy ratio of 93.8.
Other Middle Eastern countries' rankings were: Libya (55), Saudi Arabia (59), and Iran (88). Kuwait was the highest-ranked Arab state at 31.
Japan came in first in life expectancy, with the average Japanese expected to live 82.7 years. That nearly doubles that of Afghanistan, which is last on the list with the average life expectancy of 43.6.
When it comes to literacy rates, Georgia came in first with 100% and the Western African country of Mali came in last with 26.2%.
The highest GDP per capita was found in the Western European microstate of Liechtenstein, with $85,382 and the lowest was in the Democratic Republic of Congo, at $298 per capita.
The United States was listed 13th in the overall ranking, placing 26th in life expectancy (79.1), 21st in education enrollment (92.4%) and 9th in GDP per capita ($45,591). Contending economic superpowers China and India came in 92nd and 134th respectively.
Chile was the highest ranked South American country in 44th place and Libya at 55th, was first among African states.
While it was in last place in the index, Niger was the leader in fertility rates, with an average of 7.1 births per woman. Bosnia and Herzegovina and Korea had the lowest fertility rates at 1.2. The average Israeli woman has 2.8 births.
When it comes to urbanization, Hong Kong and Singapore were at the top with 100% of the population living in cities and the African state of Burundi was last with only 11%.
Israel is listed as having 91.7% living in urban areas, roughly on par with countries like Iceland, Argentina and the United Kingdom.
According to the index, Saudi Arabia spends twice the percentage of total government expenditure on education than Israel. In Israel, 13.7% of the budget goes to education while in Saudi Arabia it's 27.6%.
Trends in the index since 1980 showed an average improvement of 15 percent in countries' scores. The greatest long-term improvements have been shown by China, Iran and Nepal, but progress has been concentrated in education and health, rather than income, said the UN agency.
The index was released as part of the UNDP's annual Human Development Report, which this year highlighted migration.
"Most migrants, internal and international, reap gains in the form of higher incomes, better access to education and health and improved prospects for their children," said the report. "These gains often directly benefit family members who stay behind as well as countries of origin indirectly."
It also suggested that as the populations age in developed countries, they could benefit from increased migration to boost their work forces. But it cautioned that encouraging migration should not substitute for "efforts by developing countries to achieve growth and improve human well-being."
The report indicated that there are 2.66 million immigrants in Israel, which represent 39.8% of the total population. The US is host to nearly 40 million migrants, more than any other country, though as a share of total population it is Qatar which has the most migrants: more than four of every five people.
Israel was the only country in the index not to be identified with a region.
While all the other countries were categorized according to their geographic location, Israel, since it wasn't listed either as an Asian state or an Arab state, was categorized as "other."