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

Gary Becker, Tomas Philipson and Rodrigo Soares

American Economic Review, 2005, vol. 95, issue 1, 277-291

Abstract: GDP per capita is usually used to proxy for the quality of life of individuals living in different countries. Welfare is also affected by quantity of life, however, as represented by longevity. This paper incorporates longevity into an overall assessment of the evolution of cross-country inequality and shows that it is quantitatively important. The absence of reduction in cross-country inequality up to the 1990s documented in previous work is in stark contrast to the reduction in inequality after incorporating gains in longevity. Throughout the post-World War II period, health contributed to reduce significantly welfare inequality across countries. This paper derives valuation formulas for infra-marginal changes in longevity and computes a "full" growth rate that incorporates the gains in health experienced by 96 countries for the period between 1960 and 2000. Incorporating longevity gains changes traditional results; countries starting with lower income tended to grow faster than countries starting with higher income. We estimate an average yearly growth in "full income" of 4.1 percent for the poorest 50 percent of countries in 1960, of which 1.7 percentage points are due to health, as opposed to a growth of 2.6 percent for the richest 50 percent of countries, of which only 0.4 percentage points are due to health. Additionally, we decompose changes in life expectancy into changes attributable to 13 broad groups of causes of death and three age groups. We show that mortality from infectious, respiratory, and digestive diseases, congenital, perinatal, and "ill-defined" conditions, mostly concentrated before age 20 and between ages 20 and 50, is responsible for most of the reduction in life expectancy inequality. At the same time, the recent effect of AIDS, together with reductions in mortality after age 50-due to nervous system, senses organs, heart and circulatory diseases-contributed to increase health inequality across countries.

Date: 2005
Note: DOI: 10.1257/0002828053828563
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (483)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/0002828053828563 (application/pdf)
http://www.aeaweb.org/aer/data/mar05_data_becker.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: The Quantity and Quality of Life and the Evolution of World Inequality (2004)
Working Paper: The Quantity and Quality of Life and the Evolution of World Inequality (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:95:y:2005:i:1:p:277-291

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().