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

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  • Easterly, William

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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Bibliographic Info

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;

References

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Citations

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Cited by:
  1. David Canning, 2011. "Progress in Health around the World," PGDA Working Papers 8011, Program on the Global Demography of Aging.
  2. Doris, Aedin & O'Neill, Donal & Sweetman, Olive, 2008. "Does Growth Affect the Nature of Inequality? Ireland 1994–2001," IZA Discussion Papers 3701, Institute for the Study of Labor (IZA).
  3. 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.
  4. World Bank, 2008. "Local Gains from Global Opportunities : Improving Central America's Investment Climate," World Bank Other Operational Studies 7959, The World Bank.
  5. World Bank, 2007. "Uganda - Moving Beyond Recovery, Investment and Behavior Change, For Growth, Volume 2, Overview," World Bank Other Operational Studies 7574, The World Bank.
  6. Maya Federman & David I. Levine, 2004. "Does Industrialization = "Development"? The Effects of Industrialization on School Enrollment and Youth Employment in Indonesia," Development and Comp Systems 0407007, EconWPA.
  7. Daniel Gros & Marc Suhrcke, 2000. "Ten Years After: What is Special about Transition Countries?," CESifo Working Paper Series 327, CESifo Group Munich.
  8. Stephan Klasen & Simon Lange, 2011. "Getting Progress Right: Measuring Progress Towards the MDGs Against Historical Trends," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 87, Courant Research Centre PEG, revised 20 Feb 2012.
  9. World Bank, 2007. "Uganda - Moving Beyond Recovery : Investment and Behavior Change, For Growth, Volume 1. Summary and Recommendations," World Bank Other Operational Studies 7576, The World Bank.
  10. 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.
  11. Federman, Maya & Levine, David I., 2005. "Industrialization and Infant Mortality," Center for International and Development Economics Research, Working Paper Series qt85j7s6s6, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  12. Norman Loayza & Pablo Fajnzylber & César Calderón, 2004. "Economic Growth in Latin America and The Caribbean: Stylized Facts, Explanations, and Forecasts," Working Papers Central Bank of Chile 265, Central Bank of Chile.

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