The Measurement of Non-economic Inequality in Well-Being Indices

This paper is a critical review of composite well-being indices that account for inequality. Many well-being indices build upon the idea that while income and wealth are important, they do not constitute a person’s actual quality of life. However, first of all, the analysis finds that while well-being indices aim to go “beyond GDP” and other primarily economic indicators, many of them, unfortunately, do not focus on inequality at all. Secondly, most indices which include inequality in their measurement, only account for economic inequality. Thirdly, the article finds that the most comprehensive wellbeing index in terms of inequality is the Inequality-adjusted Human Development Index which adjusts for economic, health and education inequality. This article finds that well-being indices should make further strides to ensure the capture of non-economic inequality in terms of education and health.     

Health,Wealth and Wisdom: Exploring Multidimensional Inequality in a Developing Country

Despite a broad theoretical literature on multidimensional inequality and a widespread belief that welfare is not synonymous to income—not the least in a developing context—empirical inequality examinations rarely includes several welfare attributes. We explore three techniques on how to evaluate multidimensional inequality using Zambian household data on consumption, education, health and land. The examination indicates that level and changes in non-monetary inequality are at odds with consumption inequality. Moreover, assessment of a multidimensional index shows evidence of that dimensions of wellbeing compensate and reinforce each other with respect to inequality. However, a majority of the results using this technique are sensitive to the degree of substitution between attributes. In applying a stochastic dominance method few combinations fulfill the required dominance conditions. Accordingly, less imposed structure come at a cost. Clearly, sensitivity analyzes, explicitness and analyzes involving more than one technique are constructive in portraying multidimensional inequality.     

Business Cycles,Medicaid Generosity,and Birth Outcomes

Birth outcomes influence many aspects of later life health and wellbeing, making healthcare access during pregnancy a policy priority. Low-income mothers often depend on Medicaid, for which eligibility is determined by their income relative to state eligibility thresholds. The prevalence of adverse birth outcomes is known to exhibit cyclical variation, due in part to changes in the composition of women giving birth in response to changing economic conditions. However, cyclical variation in adverse birth outcomes also varies with respect to Medicaid eligibility thresholds. Our analysis uses birth-records data for 2000 through 2013, aggregated into 173,936 county-by-quarter observations and linked to county-level unemployment rates and state-level parental Medicaid thresholds. Using fixed-effects negative binomial models, we examine the role of Medicaid generosity in influencing birth outcomes across business cycles. We test for interactions between Medicaid and unemployment, hypothesizing that the negative effects of recessions are worse where Medicaid thresholds are more restrictive. We find that higher Medicaid generosity dampens the negative effects of recessions on birth outcomes. The extent to which Medicaid interacts with unemployment also varies according to the age and race composition of mothers; in particular, Black mothers are both most affected by unemployment and most responsive to Medicaid generosity. Given current concerns about racial gaps in both infant and maternal mortality, our findings suggest that Medicaid may be an important feature of a strategy to close gaps in the prevalence of adverse birth outcomes across racial groups, especially during bust years.     

Socio-Economic Inequalities in Happiness in China and U.S.

Our paper studies the determinants of happiness in China and U.S. and provides a better understanding of the issue of inequalities in happiness beyond income inequality. Based on the two waves of nation-wide survey data on happiness collected by World Values Survey in 1995 and 2007, Probit and ordinary least square methods are used to estimate effects of various factors on happiness. Our findings show that socio-economic inequalities increase inequalities in happiness in China. The poor are the least happy even though the income effect flats out at the high end. Individuals with below high school education attainment are less happy than those with more education. Agricultural workers are the most unhappy and are becoming even more unhappy over time. However, in U.S., there is no systematic difference in happiness across income and education groups and between agricultural and non-agricultural workers. In both countries health is a major factor contributing to happiness. Our study implies that adequate provision of national health care services should be an effective way to improve social welfare. Besides, since the probability of being happy for agricultural workers is still considerably less after controlling for income in China, policies to improve their welfare should not be limited to enhancing current income.     

Welfare Costs of Inflation: Evidence from China

In this paper, we use the China General Social Survey 2010 data to estimate the impact of inflation on the welfare of residents. By using the happiness research approach, we find that on average, a 0.1 % rise in inflation rate will cause a welfare loss of about 73.0–164.1 RMB, mainly from unexpected inflation. Furthermore, welfare costs to different income groups vary significantly: for those whose household income reaches 100,000 RMB, the welfare loss resulted from a 0.1 % rise in inflation only reduces about 0.057 % of their income, while for the below 10 thousand income group, the cost is as high as 0.739 %. It also shows that there are substantial differences in different income groups’ sensitivities to different kinds of commodities. Specifically, low-income residents are seriously harmed by an increase in food and residence prices, whereas their middle-income counterparts are mainly affected by price changes in healthcare, personal articles, transportation, communication, recreation, and education. Besides, we find that subjective well-being of debtors are significantly boosted by inflation.     

Social Comparisons and Life Satisfaction Across Racial and Ethnic Groups: The Effects of Status,Information and Solidarity

This paper explores the role of within group social comparisons on the life satisfaction of different racial and ethnic groups in the US. For Whites, we find that higher group income levels are associated with lower levels of life satisfaction, a result that is consistent with a preference for within group status. In contrast, life satisfaction is increasing in group income for Blacks. This result is consistent with the existence of social norms that emphasize Black solidarity. It is also consistent with an information effect in which Blacks rely on peer income levels to form expectations regarding their future prospects. We introduce a theoretical framework to help to distinguish between solidarity and information effects. Our empirical results provide strong support for the hypothesis that solidarity rather than information accounts for the positive relationship between average Black income and the subjective wellbeing of US Blacks. Finally, we consider two theories of social solidarity and find support for social salience but not social density in determining the strength of solidarity effects.     

Three faces of international inequality

Recent studies of international inequality have focused mostly on the trend in international income inequality. This article extends the analysis of international inequality to also include inequalities in education and health. Analyses of time-series data for more than 100 countries show that international income inequality declined from 1980 to 2003 as several large, poor Asian countries outpaced many Western countries in national income growth. By contrast, international health inequality followed a U-shaped trend, falling in the 1980s before rising in the 1990s. The turnaround in health inequality coincides with a trend of declining life expectancy in sub-Saharan Africa. International educational inequality experienced the sharpest recent decline, spurred by the global expansion of formal schooling. These findings confirm that there is more to international inequality than income inequality alone and suggest that patterns of inequality in the current era of globalization are likely more complex than many leading theories suggest.     

Aversion to Local Wellbeing Inequality is Moderated by Social Engagement and Sense of Community

Our subjective wellbeing is a mix of our personal and community wellbeing. One indication of their close relationship is the strong negative correlation between our own subjective wellbeing and the degree of subjective wellbeing inequality within our community. This negative relationship reflects our innate and socialized inequality aversion and holds regardless of whether the group is large as in the case of countries or small in the case of local neighbourhoods. While the country case has been well documented in the subjective wellbeing literature, the relationship between the local community distribution of subjective wellbeing and individual subjective wellbeing has received little attention. In this paper we demonstrate the sensitivity of individual life satisfaction to the distribution of life satisfaction within electoral wards in urban New Zealand and explore several possible behavioural drivers. We find that having social support and feeling a sense of community both reduce the negative effects of local subjective wellbeing inequality, while being less socially engaged exaggerates them. Our results highlight the potential that programmes aimed at reducing wellbeing inequalities within local communities might play in raising individual as well as average wellbeing.

     

Relative Income, Inequality and Subjective Wellbeing: Evidence for Brazil

This paper analyzes the determinants of the self-reported income and food sufficiency in Brazil, highlighting how these subjective measures of wellbeing are affected by relative conditions. Analyses are based on pooled data from the 2002/2003 and 2008/2009 Brazilian Family Budget Survey and on estimates of the multinomial relation between income and food sufficiency with absolute and relative indicators. The paper highlights that living in a more affluent neighborhood does matter in self-reported perceptions of wellbeing. Stated income sufficiency depends positively on absolute family income and negatively on relative neighbor income. Moreover, neighborhood education and regional inequality affect both stated perceptions of income and food sufficiency. The paper concludes that improving personal income and education, as well as reducing inequality, is one of the most effective ways to improve both the quality of life and the general perceptions of wellbeing in society.     

Development and Governance in the Ex-Soviet Union: An Empirical Inquiry

The widespread adoption of the concept of wellbeing in the social sciences literature has allowed researchers to move beyond a narrow economic focus on income and consumption as the primary measure of inequality and poverty. Although statistical measurement and analyses of wellbeing have become increasingly feasible due to the availability of rich datasets, the empirical literature on wellbeing remains deficient in a number of ways. In this paper we argue that it is necessary that empirical studies of wellbeing encompass multiple. Applying Sen’s capability approach as our theoretical model we subsequently develop a modelling framework that applies the polychoric principal component analysis (PCA) method for the calculation of objective wellbeing and wellbeing inequality using household asset, education, health and housing dimensions. Findings from our case study of Vietnam challenge previous single dimensional analyses and reveal a number of layers to our understanding of wellbeing inequality in Vietnam. We argue that our use of polychoric PCA is especially suited to the analysis of wellbeing by explicitly incorporating the analysis of both cardinal and ordinal variables and overcoming deficiencies established in the literature relating to the use of standard PCA.

     

The McMansionization of America? Income stratification and the standard of living in housing, 1960–2000

Consumption patterns and living standards are relatively neglected in stratification research even though they are important indicators of material well-being. Consumption inequality is related to income and wealth disparities through complex processes not yet well understood. This paper addresses this gap by analyzing a striking shift in the standard of living in housing in the US that occurred at the same time as a substantial increase in income inequality. Houses became significantly bigger in the 1980s and 1990s just as inequalities deepened, reversing an earlier trend towards smaller houses. Diverse theoretical traditions in the consumption and housing stratification literatures explain this shift differently, and in particular posit very different effects of rising income inequality. I derive several alternative expectations from these traditions: two predicting that the increasing size of houses was broadly shared across income levels, while another expects it represented increasing divergence in living standards, paralleling the trend in income inequality. I use US Census and American Housing Survey data and several different methods to adjudicate between these theories. The results provide some support for each of the alternative expectations, but the most significant finding is that big house ownership became more concentrated among the affluent. A focus on living standards thus uncovers a key source of rising disparities at the turn of the 21st century with important implications for wealth stratification too since houses are the major debt and asset held by most Americans.     

Individual Income Inequality and Its Drivers in Indonesia: A Theil Decomposition Reassessment

This article employs a Theil decomposition analysis to examine various dimensions of income inequality, using the 2007 Indonesian Family Life Survey. The empirical strategy is based on the individual-level income data—instead of group means as in the existing literature—and thus accounts for within-group dispersion of individual incomes. The decomposition exercise reveals that income inequality across education levels constitutes about 13 % of total income inequality. The urban–rural and interprovincial dimensions individually explain 6.0–6.5 %, but the contribution of income inequality by genders appears to be negligible. The findings highlight educational reform as an effective redistributive policy.     

生命周期视角下与收入相关的健康不平等分析——基于组群分析的方法

本文利用中国健康与营养调查数据,从生命周期的视角对与收入相关的健康不平等的年龄特征和变动进行了基于组群分析的实证研究。研究结果表明：与收入相关的健康不平等随着年龄的增长不断扩大：不同年龄段的健康不平等均呈现不断扩大的变动趋势,45岁以上人群的变动幅度要相对大于45岁以下人群;教育、收入和医疗的不平等是与收入相关的健康不平等扩大的主要原因,但是对45岁以下人群健康不平等的影响要大于45岁以上人群;此外,本文还进一步分析了年龄老化对健康不平等变化的影响路径。     

Human Capabilities Versus Human Capital: Guaging the Value of Education in Developing Countries

The purpose of this study is to defend the view that education should be evaluated in terms of the capability to achieve valued functionings, rather than mental satisfaction or resources. In keeping with Amartya Sen’s capabilities approach we argue that mental satisfaction provides an inaccurate metric of well-being because of the phenomenon of adaptive preferences. Equally, resources cannot be used as a metric of well-being because of inequalities in the ability to convert income and commodities into valued functionings. Hence, interpreting education as a means to create human capital is also impoverished because it evaluates education solely in terms of the accumulation of resources. In order to provide evidence in support of the human capabilities approach we statistically examine the channels through which educational attainment affects the health functionings implied by life expectancy. Using panel data analysis for 35 developing countries for the years 1990, 1995 and 2000 we compare the health functionings (as indicated by life expectancy) that are achieved by the income growth generated by educational attainment, with the total health functionings that are achieved by educational attainment. We find that educational attainment (as indicated by average years of schooling) has a significant effect on life expectancy independently of its effect by way of income growth. A 1% increase in per capita income increases life expectancy by 0.073954% while a 1% increase in average years of schooling directly increases life expectancy by 0.055324%. Because it shows that income underestimates the health functionings achieved by educational attainment, our empirical findings lend support to the claim that the value of education should be measured in terms of the capability for functioning, rather than resources.     

The Association Between Perceived Income Inequality and Subjective Well-being: Evidence from a Social Survey in Japan

Previous studies have shown that income inequality in society is negatively associated with individuals subjective well-being (SWB), such as their perceived happiness and self-rated health (SRH). However, it is not realistic to assume that individuals have precise information about actual income distribution measured by the Gini coefficient or other statistical measures. In the current study, we examined how perceived income inequality, rather than actual inequality, was associated with SWB, using cross-sectional data collected from a nationwide, Internet survey conducted in Japan (N = 10,432). We also examined how this association was confounded by individuals’ objective and subjective income status, considering the possibility that individuals with lower income status are more inclined to both perceive income inequality and feel unhappy/unhealthy. In our analysis, we focused on the perception of widening income inequality (as perceived income inequality), perceived happiness and SRH (as SWB), and household income and living standards compared with 1 year ago and compared with others (as income status). We also controlled for personality traits. We obtained three key findings: (1) perceived income inequality was negatively associated with SWB; (2) both perceived income inequality and SWB were associated with income status; and (3) the association between perceived income inequality and SWB was attenuated after controlling for income status, but not fully for perceived happiness. These findings suggest that perceived income inequality, which links actual income inequality to SWB, should be further studied.     

Poverty,Inequality and Deprivation in South Africa: An Analysis of the 1993 SALDRU Survey

This paper analyses poverty and inequality in South Africa based on data from a comprehensive multi-purpose household survey undertaken in 1993 to provide baseline statistics on poverty and its determinants to the new government. The paper shows that South Africa has among the highest levels of income inequality in the world and compares poorly in most social indicators to countries with similar income levels. Much of the poverty in the country is a direct result of apartheid policies that denied equal access to education, employment, services, and resources to the black population of the country. As a result, poverty has a very strong racial dimension with poverty concentrated among the African population. In addition, poverty is much higher in rural areas, and particularly high in the former homelands. Poverty among female-headed households and among children is also higher than average. Moreover, poverty is closely related to poor education and lack of employment. The poor suffer from lack of access to education, quality health care, basic infrastructure, transport, are heavily indebted, have little access to productive resources, and are heavily dependent on remittances and social transfers, particularly social pensions and disability grants. The paper uses an income-based definition of poverty for most of the analysis. In addition, it develops a broad-based index of deprivation including income, employment, wealth, access to services, health, education, and perceptions of satisfaction as its components. While on average the two indicators correspond fairly closely, the income poverty measure misses a considerable number of people who are severely deprived in many of the non-income measures of well-being. This group of severely deprived not identified by the income poverty measure consists predominantly of Africans living in rural areas, concentrated particularly in the province of KwaZulu/Natal.     

Overeducation,Skills and Wage Penalty: Evidence for Spain Using PIAAC Data

Despite well documented high levels of socioeconomic inequalities, health gradients by socioeconomic status (SES) in contemporary China have been reported to be limited. Using data from the 2010–2012 China Family Panel Studies, we reexamine associations between three sets of SES—human capital, material conditions, and political capital—and self-rated health among Chinese adults 18–70 years old, capitalizing on anchoring vignette data to adjust for reporting heterogeneity. We find strong evidence of substantial variations in reporting behaviors by education, cognition, and family wealth but not by family income or political capital. Failing to correct for reporting heterogeneity can bias the estimates of SES gradients in self-rated health as much as nearly 40 %. After vignette adjustment, we find significantly positive associations of education, family income, wealth, and political capital with self-rated health. Individuals’ cognitive capacity, however, does not predict self-rated health.     

The Multi-dimensional Characteristics of Wellbeing: How Different Aspects of Wellbeing Interact and Do Not Interact with Each Other

Because wellbeing is a multi-varied and dynamic phenomenon, social scientists need to better understand how different aspects of people’s wellbeing are tied together and how these ties differ between individuals at one point in time and within individuals over time. The paper outlines a general model that considers the multidimensional structure of wellbeing. We utilize the potential of latent variable modelling on a unique Swedish database: the Panel Survey of Ageing and the Elderly (PSAE). An inclusive and flexible model that considers the interactions between semi-autonomous domains (material resources, health, psychosocial factors, lifestyle, etc.) is developed. Our empirical study is based on cross-sectional PSAE data and focuses on people 55 years or older (N = 5,374). The analysis takes advantage of recent developments in statistical theory in the field of latent variable modelling to bring about a more dynamic and theory confirming analysis of a multifaceted phenomenon such as wellbeing.     

Income inequality and fertility: A comparative view

Summary Most studies pertaining to the relationship between population and economic development suffer from a major flaw. Researchers use aggregate measures like income or energy consumption per head as indicators of economic development. Such aggregate measures fail to take into account the nature of the distribution of income or energy consumption to the population. The present study attempts to demonstrate the importance of incorporating the nature of distribution of resources as an important intervening variable in the study of the overall relationship between population and economic development. A measure of income inequality is developed which represents the difference between rural and urban incomes. This measure is justified in terms of the distinctiveness of urban and rural sectors in the process of development. The data used relate to societal measures of fertility, income, income inequality, etc. Consistently with existing literature, we observe that, generally speaking, economic development does entail a reduction in rural-urban income inequalities. On the other hand, a substantial part of the negative effect of an increase in income per head can be nullified if such an increase were not also accompanied by a reduction in rural-urban income inequality. Also, a substantial part of the negative effect of an increase in income per head and the level of education in reducing the level of infant mortality would be nullified if it did not also result in a reduction of rural-urban income inequality. On the other hand, it is quite possible for the level of education in a society to increase together with an increase in income per head without substantially altering the extent of inequality of income between the rural and the urban population. It is suggested that the positive relationship between rural-urban income inequality and the level of fertility is due to higher rural fertility rates in a high-inequality country. By implication, this would mean that higher standards of living for the rural population compared with its urban counterpart will have a favourable impact in reducing rural fertility.     

Life Course Changes in Smoking by Gender and Education: A Cohort Comparison Across France and the United States

Widening of educational disparities and a narrowing female advantage in mortality stem in good part from disparities in smoking. The changes in smoking and mortality disparities across cohorts and countries have been explained by an epidemic model of cigarette use but are also related to life course changes. To better describe and understand changing disparities over the life course, we compare age patterns of smoking in three cohorts and two nations (France and the US) using smoking history measures from the 2010 French health barometer (N = 20,940) and the 2010 US National Health Interview Survey Sample Adult File (N = 20,444). The results demonstrate statistically significant widening of gender and educational differences from adolescence to early and middle adulthood, thus accentuating the disparities already emerging during adolescence. In addition, the widening disparities over the life course have been changing across cohorts: age differences in educational disparities have grown in recent cohorts (especially in France), while age differences in gender disparities have narrowed. The findings highlight the multiple sources of inequality in smoking and health in high-income nations.