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The Quantity and Quality of Life and the Evolution of World Inequality

  • Gary S. Becker
  • Tomas J. Philipson
  • Rodrigo R. Soares

Lack of income convergence for the world as a whole has led to concerns about the impact of globalization of markets on world inequality. GDP per capita is usually used to proxy for the quality of life of individuals living in different countries. However, well-being is also affected by quantity of life, as represented by longevity. This paper incorporates longevity into an overall assessment of the evolution of cross-country inequality. The absence of income convergence noticed in the growth literature is in stark contrast with the reduction in inequality after incorporating recent gains in longevity. The paper computes a full' income measure to value the life expectancy gains experienced by 49 countries between 1965 and 1995. Countries starting with lower income tended to grow more in terms of full' income than countries starting with higher income. The average growth rate of full' income is about 140% for developed countries, compared to 192% for developing countries. Additionally, we decompose changes in life expectancy into changes attributable to thirteen broad groups of causes of death. Infectious, respiratory and digestive diseases, congenital and perinatal conditions, and ill-defined' conditions are responsible for most of the mortality convergence observed between 1965 and 1995.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9765.

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Date of creation: Jun 2003
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Publication status: published as Becker, Gary S., Tomas J. Philipson and Rodrigo R. Soares. "The Quantity And Quality Of Life And The Evolution Of World Inequality," American Economic Review, 2005, v95(1,Mar), 277-291.
Handle: RePEc:nbr:nberwo:9765
Note: EFG HE
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  1. Rodrigo R. Soares, 2003. "Mortality Reductions, Educational Attainment, and Fertility Choice," Development and Comp Systems 0312006, EconWPA.
  2. Neumayer, Eric, 2003. "Beyond income: convergence in living standards, big time," Structural Change and Economic Dynamics, Elsevier, vol. 14(3), pages 275-296, September.
  3. Randa Sab & Stephen C. Smith, 2002. "Human Capital Convergence: A Joint Estimation Approach," IMF Staff Papers, Palgrave Macmillan, vol. 49(2), pages 3.
  4. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  5. W. Kip Viscusi & Joseph E. Aldy, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," NBER Working Papers 9487, National Bureau of Economic Research, Inc.
  6. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  7. Sherwin Rosen, . "The Value of Changes in Life Expectancy," University of Chicago - Population Research Center 87-14, Chicago - Population Research Center.
  8. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-32, December.
  9. Martin Browning & Lars Peter Hansen & James J. Heckman, 1999. "Micro Data and General Equilibrium Models," Discussion Papers 99-10, University of Copenhagen. Department of Economics.
  10. Tomas J. Philipson & William H. Dow & Xavier Sala-i-Martin, 1999. "Longevity Complementarities under Competing Risks," American Economic Review, American Economic Association, vol. 89(5), pages 1358-1371, December.
  11. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc.
  12. repec:reg:rpubli:282 is not listed on IDEAS
  13. Dan Usher, 1973. "The Measurement of Economic Growth," Working Papers 145, Queen's University, Department of Economics.
  14. Stephen L. Parente & Edward C. Prescott, 1993. "Changes in the wealth of nations," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 3-16.
  15. Gary S. Becker & Julio Jorge El´┐Żas, 2007. "Introducing Incentives in the Market for Live and Cadaveric Organ Donations," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 3-24, Summer.
  16. Cannon, Edmund S & Duck, Nigel W, 2000. "Galton's Fallacy and Economic Convergence," Oxford Economic Papers, Oxford University Press, vol. 52(2), pages 415-19, April.
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