Does National Income Inequality Affect Individuals’ Quality of Life in Europe? Inequality,Happiness, Finances,and Health

This paper analyses the effect of income inequality on Europeans’ quality of life, specifically on their overall well-being (happiness, life satisfaction), on their financial quality of life (satisfaction with standard of living, affordability of goods and services, subjective poverty), and on their health (self-rated health, satisfaction with health). The simple bivariate correlations of inequality with overall well-being, financial quality of life, and health are negative. But this is misleading because of the confounding effect of a key omitted variable, national economic development (GDP per capita): Unequal societies are on average much poorer (r = 0.46) and so disadvantaged because of that. We analyse the multi-level European Quality of Life survey conducted in 2003 including national-level data on inequality (Gini coefficient) and economic development (GDP) and individual-level data on overall well-being, financial quality of life, and health. The individual cases are from representative samples of 28 European countries. Our variance-components multi-level models controlling for known individual-level predictors show that national per capita GDP increases subjective well-being, financial quality of life, and health. Net of that, the national level of inequality, as measured by the Gini coefficient, has no statistically significant effect, suggesting that income inequality does not reduce well-being, financial quality of life, or health in advanced societies. These result all imply that directing policies and resources towards inequality reduction is unlikely to benefit the general public in advanced societies.     

International Comparisons of Trends in Economic Well-being

This paper develops a new measure of economic well-being for selectedOECD countries for the period 1980 to 1996 and compares trends in thisnew Index to GDP per capita. We argue that the economic well-being ofa society depends on the level of average consumption flows, aggregateaccumulation of productive stocks, inequality in the distribution ofindividual incomes and insecurity in the anticipation of future income.However, the weights attached to each component will vary, dependingon the values of different observers. We argue that public debatewould be improved if there is explicit consideration of theaspects of economic well-being obscured by average income trends andif the weights attached to these aspects were made visible and wereopen for discussion.     

Economic Growth and Child Undernutrition in sub‐Saharan Africa

Despite recent improvements in economic performance, undernutrition rates in sub‐Saharan Africa appear to have improved much less and rather inconsistently across the continent. We examine to what extent there is an empirical linkage between income growth and reductions of child undernutrition in Africa. We pool all DHS surveys for African countries, control for other correlates of undernutrition, and add country‐level GDP per capita. We find that a 10 percent increase in GDP per capita is associated with 1.5 to 1.7 percent lower odds of being stunted, 2.8 to 3.0 percent lower odds of being underweight, and 3.5 to 4.0 percent lower odds of being wasted. Other drivers of undernutrition, including relative socioeconomic status and mother's education and her nutritional status, are quantitatively more important. This suggests that further increases in GDP will have only a modest impact on undernutrition and broader interventions are required to accelerate progress.     

The Contextual Effects of Political Trust on Happiness: Evidence from China

Political trust is often considered as legitimacy enhancing, but whether political trust is well-being enhancing is still underexplored. Using micro data from the East Asian Social Survey 2012, this study investigates the association between province-level/aggregate political trust and individual happiness in China, and explores the role of economic development in influencing individual political trust after the period of rapid growth in 1990–2010. Results show a positive and significant contextual effect of political trust on individual happiness in China, with the endogeneity problem addressed by an instrument variables method. Currently in China, it is a higher provincial rate of GDP growth rather than GDP per capita that predicts a higher level of political trust. Economic growth still significantly reinforces the level of individual political trust and even helps to raise individual political trust among economically disadvantaged populations. The “critical citizens” phenomenon has not yet grown into a nationwide trend. Since the positive contextual effect of political trust on individual subjective well-being, policy makers are encouraged to maintain the stock of political trust through good governance.     

The Determinants of Economic Growth Versus Genuine Progress in South Korea

This paper examines whether the drivers of economic growth are the same as those for genuine progress in the case of South Korea. Using data covering the period 1970–2005, the paper first constructs a Genuine Progress Indicator (GPI). An empirical model is then specified and estimated using growth in GDP per capita and growth in the GPI per capita as dependent variables. Results indicate that while physical capital, research and development, exports, and inflation are all important in determining growth in GDP per capita, only physical capital is a driver of genuine progress. These findings highlight the need for policymakers to identify and target other determinants of genuine progress to improve the well-being of South Koreans, rather than focus attention on traditional sources of economic growth.     

Modeling and Forecasting Mortality With Economic Growth: A Multipopulation Approach

Research on mortality modeling of multiple populations focuses mainly on extrapolating past mortality trends and summarizing these trends by one or more common latent factors. This article proposes a multipopulation stochastic mortality model that uses the explanatory power of economic growth. In particular, we extend the Li and Lee model (Li and Lee 2005) by including economic growth, represented by the real gross domestic product (GDP) per capita, to capture the common mortality trend for a group of populations with similar socioeconomic conditions. We find that our proposed model provides a better in-sample fit and an out-of-sample forecast performance. Moreover, it generates lower (higher) forecasted period life expectancy for countries with high (low) GDP per capita than the Li and Lee model.     

新疆人口数量变化能否促进经济增长？--基于VEC模型的动态实证研究

为了研究新疆人口数量变化能否促进经济增长,本文在生态环境承载力、劳动力边际产出和人口理论方面论述了人口数量变化与经济增长的相互作用机理,在此基础上通过VEC模型对人口数量、人均GDP和财政预算收入进行动态研究,结果为：长期人均GDP和人口数量成正向关系,弹性为0.33,但财政预算收入却因人口数量的增加而呈现小幅度降低,弹性为0.09。短期内人均GDP与人口数量成反向关系,财政预算收入的增加反而能够促进人口数量的增加。     

Migrant Workers and Workplace Bullying in Urban China

Trends of subjective well-being (SWB) in transition countries are peculiar: they show substantial changes that are more strongly correlated with the trends of GDP than in other developed countries. This paper examines the role of the trends of GDP and of social trust in predicting the trends of well-being. We find that the strength of the relationship between social trust and SWB over the medium-term is comparable to that of GDP. We conclude that in the medium-term, even in countries where material concerns strongly affect well-being, social trust is a powerful predictor of the trends of SWB. However, in the short run the relationship between social trust and SWB does not hold and GDP stands out as the only significant correlate of SWB.     

An Econometric Analysis of the Relationship Between Millennium Development Goals,Economic Growth and Financial Development in South Africa

The relationship between financial development, economic growth and millennium development goals are unsettled in the literature. Using four indicators of financial development, this paper studies the link between the three variables in South Africa. In general, per capita income improves per capita spending on education in the short run. However, total domestic credit to GDP ratio decreases spending on education. There are highly significant long run relationships among the variables. Improving access to private sector credit and increasing per capita incomes are associated with improvement in health outcomes in South Africa. There are no short run nor long run relationships between household spending on clothes, economic growth and financial sector development. Improved private sector credit also improves household spending on food. In general, there are long run relationships between per capita spending on food, per capita income and financial sector development.

     

The National Work–Life Balance Index©: The European Case

More than 5 years since the outbreak of the global financial crisis, a flurry of evidence is emerging on the effects of the ensuing economic downturn on unemployment and poverty rates in rich countries, but less is known about cross-country differences in subjective assessments of the crisis and whether adults in households with children were affected to a greater extent. This paper investigates differences in the perceived impact of the economic crisis between adults in households with and without children in 17 European countries, using data from the Life in Transition Survey 2010 in a multilevel modelling framework. It also explores differences in the coping strategies that households adopted to deal with the decline in income or economic activity. Everything else being equal, perceptions of the crisis were more widespread in countries with higher rates of child poverty, lower economic growth and lower GDP per capita. Across countries, perceptions of the crisis closely trailed subjective indicators of financial difficulties from other international surveys conducted in 2010. Adults in households with children were more likely to report an impact of the crisis, with larger differences in countries with higher rates of monetary child poverty. Adults in households with children also adopted a greater variety of coping strategies than the rest, prioritizing expenditure on basic necessities, while cutting back on luxuries and holidays. Nevertheless, many still reported reduced consumption of staple foods as a result of economic difficulties.     

Shares of Housework Between Mothers,Fathers and Young People: Routine and Non-routine Housework,Doing Housework for Oneself and Others

This study applies wavelet coherency analysis to examine the relationship between the U.S. per capita real GDP and six income inequality measures over the period 1917 to 2012. Wavelet analysis allows the simultaneous examination of correlation and causality between the two series in both the time and frequency domains. Our findings provide robust evidence of positive correlation between the growth and inequality across frequencies. Yet, directions of causality vary across frequencies and evolve with time. Evidence that inequality leads per capita real GDP at both high- and low-frequencies exists for the Top 1 and 10% measures of inequality with little evidence that real GDP per capita leads inequality. In the time-domain, the time-varying nature of long-run causalities implies structural changes in the two series. These findings provide a more thorough picture of the relationship between the U.S. per capita real GDP and inequality measures over time and frequency, suggesting important implications for policy makers.     

The Impact of Colonial Heritage on Development in Sub-Saharan Africa

The study explores the hypothesis of a relationshipbetween colonial heritage and development insub-Saharan Africa. Seventeen countries thatexperienced indirect colonial rule and an equal numberwith a history of direct rule in the region areexamined. Development is defined first, in terms ofhuman development [as per UNDPs Human DevelopmentIndex (HDI)], and then, as the ability of a country totranslate economic gains into improved livingconditions (defined as the difference between acountrys real GDP per capita ranking minus its HDIranking). A relationship is found between colonialheritage and human development but not betweencolonial heritage and the ability to translateeconomic gains into improved conditions. It isconcluded that the difference in human conditions ismore a function of inter-country variabilities inindividual and local autonomy than by state actionsspecifically aimed at improving these conditions.     

Estimating Cuban gross domestic product per capita in dollars using physical indicators

A methodology for estimating levels of gross domestic product per capita (GDP/capita) which obviates the need for estimating GDP/capita in domestic currency and converting to another currency is the physical indicators (PI) approach developed by Janossy-Ehrlich. Using this methodology, estimates of Cuban GDP/capita in dollars for four years (1965, 1970, 1975 and 1977) have been made. The estimates rely on the relationships between GDP/capita in dollars and levels of consumption or production of 24 physical indicators in 28 reference countries for each of the four years. The relationships are estimated using both univariate and multivariate regression techniques. The PI estimates of GDP/capita in dollars are compared with other measures of Cuban macroeconomic performance to test their reasonableness. The paper closes with some tentative conclusions regarding the applicability of the PI method to the estimation of GDP/capita in dollars for Cuba and for other developing countries.     

Temporal variation in the relationship between environmental demands and well-being: a panel analysis of developed and less-developed countries

This study assesses the degree to which the relationship between the environmental demands of countries (measured as ecological footprint per capita) and well-being (measured as life expectancy) has changed over the last several decades (1961–2007) and whether the nature and extent of these changes differ between developed and less-developed countries. Pooled ordinary least squares regression results indicate that decoupling has occurred among developed countries, where the relationship between ecological footprint and life expectancy weakened substantially over time, becoming negative in later years. In less-developed countries, the relationship has intensified substantially, with the effect of ecological footprint on life expectancy becoming stronger over time. Fixed-effects regression results provide similar results for developed countries but indicate slight decoupling between increases in ecological footprint and life expectancy among less-developed countries. The implications of these results are discussed in the context of contraction and convergence approaches to sustainability.     

Does Development Make You Happy? Subjective Wellbeing And Economic Growth In Developing Countries

The evidence for any relationship between GDP/capita growth and growth in subjective wellbeing (SWB) in wealthier countries is disputed, at best. However, there are a number of reasons commonly articulated for thinking the relationship should be stronger in less developed countries (LDCs). This paper looks at both reasons for expecting the relationship to be stronger in developing countries, and those for a weak link that might still apply in LDCs. Finally, it turns to a limited data set to see what that might tell us. The results suggest that, at least in middle-income countries, there is little strong evidence in favor of a connection between economic growth and SWB.     

The Cost of Well-Being

It is by now common knowledge that in switching from GDP to alternative, multidimensional, measures of collective well-being one can provide a better account of a country’s socio-economic conditions. Such a gain, however, comes at the price of losing output-to-input type of link between well-being and the resources necessary to make it available. Since well-being measures are not meant to be only an exercise in documentation, but also to inform policies and priorities, we propose a method to build a measure of well-being in the form of a single index, as for GDP, which takes into account: (1) the social and environmental costs, not considered in the GDP, and (2) the use of conventional resources (capital and labour), not considered in the currently available multidimensional measures of well-being. We use a Data Envelopment Analysis type of model, integrated with Principal Component Analysis, to evaluate OECD countries’ relative efficiency in providing well-being. Our results show that the costs of producing well-being have a large and significant impact on the resulting index of well-being. Therefore, high efficiency in providing well-being and high income cannot be considered a proxy to each other. In addition, it is shown that countries react differently to the different costs of well-being: poor countries are, on average, more efficient in terms of conventional inputs (labour and capital), while rich countries have higher efficiency indices relative to social and environmental costs. The close to zero correlation between GDP and well-being indices for rich countries provides new support to the “Easterlin paradox”.     

Measuring World Better Life Frontier: A Composite Indicator for OECD Better Life Index

The OECD Better Life initiative recently released a comprehensive set of 11 indicators of well-being covering a group of countries. Each individual indicator corresponds to a key topic that is essential to well-being. However, the problem of aggregating them is left to users of this dataset. Using these as individual indicators, we propose a composite indicator of overall well-being, which is intended to measure the performance of each country in terms of providing well-being to its people. The ‘benefit of the doubt’ approach (BOD), a well-known aggregation tool based on a weighed sum, assigns the most favourable weights for each entity under investigation. BOD may also be considered to evaluate the performance of each entity in terms of its efficiency. Regarding individual indicators as outputs, it constructs the benchmark production frontier from observed individual indicators. A composite indicator based on BOD equals the distance between each entity’s individual indicator and the production frontier, indicating its efficiency. It is widely considered that the well-being of a country’s people stems from its productive base, which is characterized by capital assets and social infrastructures. Thus, the productive base can be considered the input used to produce well-being, which is reflected by individual indicators. Therefore, when we apply BOD to aggregate individual well-being indicators across countries, we implicitly assume that all countries have the same productive base, as BOD addresses only the output and neglects the input. This inaccurate assumption leads to a distorted performance measure. Data envelopment analysis (DEA), in which BOD has its roots, is a tool to measure the efficiency of each entity by allowing for differences in inputs as well as outputs across entities. DEA also measures efficiency by using the distance to the production frontier; however, unlike BOD, DEA constructs the production frontier more accurately by utilizing the information of inputs as well as outputs, leading to a better performance measure. We apply DEA to aggregate 11 individual well-being indicators into a composite indicator using the World Bank’s estimates of each country’s productive base. The composite indicator based on BOD is distributed similarly to and is highly correlated with the existing Human Development Indicator (HDI). It is also positively correlated with GDP per capita. On the other hand, we show that the composite indicator based on DEA is negatively correlated with HDI as well as GDP per capita.     

Dimensions Of Well-Being In Eu Regions: Do GDP And Unemployment Tell us All We Need To Know?

Unemployment and GDP are widely used as proxies for a broader concept of well-being in the European Union, especially at regional level. This paper asks whether such an approach is reasonable. Using data from a range of sources, it examines the association between unemployment, GDP and a number of alternative well-being indicators in five domains – material welfare, education, health, productive activity and social participation. It finds that GDP per capita is not a good proxy for wider regional well-being within a country, but that the regional unemployment rate performs reasonably well. Pooling fifteen member states together, however, regional GDP is a better predictor of a region’s well-being than unemployment. This is because national GDP tells us more about how a country is doing overall than the national unemployment rate. These findings have implications for the European Council’s decision to treat variation in the regional unemployment rates as the sole indicator of regional inequality within Member States, and for the allocation of the Structural Funds.