A Contribution to the Empirics of Welfare Growth

Konstantinos Vrachimis and Marios Zachariadis

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: This paper compares the determinants of economic growth and welfare growth. Our main result is that determinants may differ or have different impact on welfare outcomes as compared to economic outcomes. Human capital plays a bigger role in determining the former, so that policies targeting human capital can have a greater effect on the welfare of societies than one would think by looking at their impact on economic growth alone. Institutions also have a greater effect on welfare growth compared to their impact on economic growth, consistent with the importance of government stability for the uninterrupted provision of health-related inputs and information. Finally, initial income has a greater impact on welfare growth than on real income per capita growth, implying even faster convergence than in Becker, Philipson, and Soares (2005) after adding a number of economic, health-related, institutions-related, and geographic variables. We conclude that there exist systematic differences for the impact of a number of factors on economic relative to welfare outcomes.

Keywords: Economic growth; Welfare; Full income (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-01
New Economics Papers: this item is included in nep-fdg and nep-hrm
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Journal Article: A contribution to the empirics of welfare growth (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:01-2010

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