The Levy Institute Measure of Economic Well-Being, France, 1989 and 2000

Levy Economics Institute, Working Paper No. 679

94 Pages Posted: 27 Jul 2011 Last revised: 28 Jul 2011

See all articles by Thomas Masterson

Thomas Masterson

Bard College - Levy Economics Institute

Ajit Zacharias

Bard College - Levy Economics Institute

Selcuk Eren

Bard College - Levy Economics Institute

Edward N. Wolff

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER); Bard College - Levy Economics Institute

Date Written: July 26, 2011

Abstract

We construct estimates of the Levy Institute Measure of Economic Well-Being for France for the years 1989 and 2000. We also estimate the standard measure of disposable cash income (DI) from the same data sources. We analyze overall trends in the level and distribution of household well-being using both measures for France as a whole and for subgroups of the French population. The average French household experienced a slower rate of growth in LIMEW than DI over the period. A substantial portion of the growth in well-being for the middle quintile was a result of increases in net government expenditures and income from wealth. We also found that the well-being of families headed by single females relative to married couples deteriorated much more, while the well-being of households headed by the elderly relative to households headed by the nonelderly improved much more than indicated by the standard measure of disposable income. The conventional measure indicates that a steep decline in economic inequality took place between 1989 and 2000, while our measure indicates no such change. We argue that these outcomes can be traced to the difference in the treatment of the role of wealth in shaping economic inequality. Our measure also indicates that, on balance, government expenditures and taxes did not have an inequality-reducing effect in France for both years. This is, again, contrary to conventional wisdom.

Keywords: Levy Institute Measure of Economic Well-being (LIMEW), France, Economic Well-Being, Economic Inequality, Household Income Measures

JEL Classification: D31, D63, P17

Suggested Citation

Masterson, Thomas and Zacharias, Ajit and Eren, Selcuk and Wolff, Edward N., The Levy Institute Measure of Economic Well-Being, France, 1989 and 2000 (July 26, 2011). Levy Economics Institute, Working Paper No. 679, Available at SSRN: https://ssrn.com/abstract=1895635 or http://dx.doi.org/10.2139/ssrn.1895635

Thomas Masterson (Contact Author)

Bard College - Levy Economics Institute ( email )

Blithewood Ave
Annandale-on-Hudson, NY 12504
United States
845-758-7700 (Phone)
845-758-1149 (Fax)

HOME PAGE: http://levy.org

Ajit Zacharias

Bard College - Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504
United States
845-758-7734 (Phone)
845-758-1149 (Fax)

HOME PAGE: http://www.levy.org

Selcuk Eren

Bard College - Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504
United States
845-758-7740 (Phone)
845-758-1149 (Fax)

HOME PAGE: http://www.levy.org

Edward N. Wolff

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States
212-998-8917 (Phone)
212-995-4186 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Bard College - Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504
United States

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