The country retained its position despite its recent economic crisis
They are the most indebted people in the world, live through long, dark winters and have a shorter life expectancy than several Mediterranean countries.
Yet for the past four decades, the Danes have consistently rated themselves as the happiest people on earth.
"You can reach a high-ranking politician or a director here even if you are an ordinary person," said Josephine Hoegh, a woman from the Philippines who moved to the Scandinavian country 40 years ago.
Denmark first topped the happiness table in 1973, when a European Union survey found that people there were more satisfied with life than in any other member state.
This year, it held on to the top spot in the United Nations' annual World Happiness Report even as it suffered through the worst economic crisis of its post-World War II history.
In the study, respondents were asked to evaluate the current state of their lives using a scale of zero to 10, where a top rating signified the best possible life for them, and zero the worst. Denmark scored an average 7.693.
"One of the most important things making the Danes happy is the security in Danish society," said Meik Wiking, director of the Happiness Research Institute, a Danish think-tank aiming to improve the quality of life in Denmark and abroad.
"There is a high degree of financial security. If we lose our jobs we get support, when we fall ill we can go to the hospital, and so on," he added.
Denmark has the highest taxes in the world as a percentage of the overall economy, but many Danes value the social security net they get in return, including subsidised childcare and unemployment insurance.AFP