Life During Growth
Posted: 13 Apr 1998
Date Written: December 1997
The progress of life during growth is surprisingly uneven. This paper reaches this conclusion with a panel dataset of 95 indicators covering up to 4 time periods (1960, 1970, 1980, and 1990). The indicators cover 7 subjects: (1) individual rights and democracy, (2) political instability and war, (3) education, (4) health, (5) transport and communications, (6) inequality across class and gender, and (7) "bads". Virtually all of these indicators show quality of life across nations to be positively associated with per capita income. However, when country effects are removed using either fixed effects or an estimator in first differences, I find that the effects of growth on "life" are uneven and often nonexistent. Moreover, exogenous time shifts are more important than growth effects in the majority of indicators. With the fixed effects estimator, growth has an impact on the quality of life that is significant, positive, and more important than exogenous shifts for 12 out of 95 indicators. With a first-differences IV estimator, growth has a causal impact on the quality of life that is significant, positive, and more important than exogenous shifts for 7 out of 79 quality of life. The conclusion speculates about such explanations for the uneven results as (1) the long and variable lags that may come between growth and changes in the quality of life, and (2) the possibility that world growth is more important than home country growth for many quality of life indicators.
JEL Classification: I0, H4, O1
Suggested Citation: Suggested Citation