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Population and Welfare: Measuring Growth When Life Is Worth Living

Author

Listed:
  • Mohamad Adhami
  • Mark Bils
  • Charles I. Jones
  • Peter J. Klenow

Abstract

Economic growth is typically measured in per capita terms. A long tradition in philosophy, however, suggests that social welfare may depend on the number of people as well. To illustrate how much this matters quantitatively, we decompose welfare growth—measured in consumption-equivalent (CE) units—into contributions from rising population and rising per capita consumption. Because of diminishing marginal utility from consumption, population growth is scaled up by a value-of-life factor that empirically averages nearly 3 across countries since 1960. Population increases are therefore a major contributor to growth if one takes a total utilitarian perspective.

Suggested Citation

  • Mohamad Adhami & Mark Bils & Charles I. Jones & Peter J. Klenow, 2026. "Population and Welfare: Measuring Growth When Life Is Worth Living," American Economic Journal: Macroeconomics, American Economic Association, vol. 18(4), pages 356-389, October.
    • Handle: RePEc:aea:aejmac:v:18:y:2026:i:4:p:356-89
    DOI: 10.1257/mac.20250382
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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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