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Life during growth : international evidence on quality of life and per capita income

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Author Info
Easterly, William

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Abstract

Remarkably diverse indicators show quality of life across nations to be positively associated with per capita income. But changes in quality of life as income grows are surprisingly uneven. Moreover, in either level or changes, the effect of exogenous shifts over time is surprisingly strong. It is possible that changes in a home country's quality-of-life indicators depend as much on changes in world income as on changes in home country growth. The improvement in life expectancy everywhere, for example, may have reflected technical breakthroughs in antibiotics associated with world economic growth. The strong results on exogenous time shifts point in this direction. The author reaches this conclusion using a panel data set of 81 indicators covering up to four periods (1960, 1970, 1980, and 1990). The indicators cover seven subjects: health, education, individual rights and democracy, political instability and war, transport and communications, inequality across class and gender, and"bads."With a seemingly unrelated regressions (SUR) estimator in levels, per capita income has an impact on the quality of life that is significant, positive, and more important than exogenous shifts for 32 of 81 indicators. With a fixed effects estimator, growth has an impact on the quality of life that is significant, positive, and more important than exogenous shifts for 6 of 69 quality-of-life indicators. The evidence that life gets better during growth is surprisingly uneven. The cross-country relationship between income and diverse indicators of the quality of life remains strong. The author speculates about explanations for the pattern of results, such as the long and variable lags that may come between growth and changes in the quality of life, and the possibility that global socioeconomic progress is more important than home country growth for many quality-of-life indicators.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2110.

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Date of creation: 31 May 1999
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Handle: RePEc:wbk:wbrwps:2110

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Keywords: Poverty Monitoring&Analysis; Public Health Promotion; Health Economics&Finance; Environmental Economics&Policies; Labor Policies; Inequality; Environmental Economics&Policies; Governance Indicators; Health Economics&Finance; Poverty Monitoring&Analysis;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aedin Doris & Donal O’Neill & Olive Sweetman, 2008. "Does Growth Affect the Nature of Inequality? Ireland 1994-2001," Economics, Finance and Accounting Department Working Paper Series n1930708.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth. [Downloadable!]
    Other versions:
  2. Maya Federman & David Levine, 2003. "Does Industrialization = "Development"? The Effects of Industrialization on School Enrollment and Youth Employment in Indonesia," Center for International and Development Economics Research, Working Paper Series 1048, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
    Other versions:
  3. Maya Federman & David I. Levine, 2005. "Industrialization and Infant Mortality," Development and Comp Systems 0504008, EconWPA. [Downloadable!]
    Other versions:
  4. Maya Federman & David I. Levine, 2005. "The Effects of Industrialization on Education and Youth Labor in Indonesia," The B.E. Journal of Macroeconomics, Berkeley Electronic Press, vol. 0(1). [Downloadable!]
  5. Gachet, Ivan & Girjalva, Diego & Rivadeneira, Ana & Uribe, Carlos, 2007. "Un Marco de Consistencia Macroeconómica para la Economía Ecuatoriana: Un Regreso a los Fundamentos
    [Macroeconomic Consistency Framework for the Ecuadorian Economy: Getting Back to Fundamentals]    ," MPRA Paper 16799, University Library of Munich, Germany. [Downloadable!]
  6. Enrique Delamonica & Santosh Mehrotra, 2006. "A Capability centred approach to environmental sustainability: Is productive employment the missing link between micro-and macro polices?," Working Papers 13, International Policy Centre for Inclusive Growth. [Downloadable!]
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