Sustainable Economic Growth and Well-Being
Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM
- Chair: Jason Furman, Harvard University
Income and Emotions: How the Rich and Poor Experience their Lives
AbstractRich people report greater levels of life satisfaction, but what about other self-reported measures of well-being? We investigate the relationship between GDP and reports of well-being across countries and within countries to paint a richer picture of the emotional lives of people around the world.
Economic Institutions and Social Progress
AbstractThis paper examines the role of economic institutions and performance in shaping social progress. We define social progress as the dimensions of societal performance not captured by traditional economic measures such as GDP. While a long line of research links the quality of inclusive economic institutions (such as rule of law and non-expropriation) to economic development and GDP, the link between the foundations of economic development and social progress has been largely anecdotal. To assess the relationship between economic institutions and social progress, we construct a measure of social progress that is conceptually independent of GDP, focusing on three core dimensions -- basic human needs, foundations of well-being, and opportunity. From a theoretical perspective, the relationship between economic institutions and performance with these alternative dimensions of social progress is subtle. While areas such as basic human needs are likely closely connected to the overall availability of economic resources within a country, areas that depend on the investment choices of individuals and communities (such as education, health, and environmental protection) may not only depend on the availability of economic resources but the presence of inclusive economic institutions. Finally, the relationship between economic factors and the opportunity dimension is ambiguous, as factors enabling individual social freedoms (e.g., freedom of religion) and inclusion (e.g., tolerance towards minorities) may be largely independent of the level of economic development or the nature of purely economic institutions. We explore these ideas by examining how variation in economic institutions and performance across countries and over time is related to changes in social progress and its dimensions over time within countries. In addition to the close cross-sectional correlation between measures of institutional quality such as rule of law, GDP per capita, and social progress, we highlight three core findings. First, the change in social progress between 2014-2017 is associated with improvements in economic performance between 2005-2014, a result drive by the close relationship between economic growth and subsequent improvements in basic human needs. Second, even after controlling for the level and changes in economic performance, changes in economic institutions such as rule of law have a separate impact on subsequent changes in foundations of wellbeing. Finally, there is little empirical relationship between economic institutions and performance, and changes in the opportunity dimension of social progress. Together, these findings highlight the dynamic interplay between economic development and social progress, and the potential for the measurement of social progress to enhance our understanding of the drivers of societal well-being.
University of California-Los Angeles
Daniel Colin Fehder,
University of Southern California
- I3 - Welfare, Well-Being, and Poverty