Monday, July 19, 2004

Are we better than we were N years ago?

Arnold Kling has a nice summary of work by Fogel (Econ, Chicago, Nobel Prize) who calculates whether people really are or are not better off than they were in the past. Fogel notes astonishing improvements in health, leisure, consumption, longevity etc -- virtually every statistic one could associate to wellbeing has become dramatically better. While some people like the characterize the US as a land of "haves" and "have nots", from a historical perspective it really is a land of "haves" and "have mores". The same goes for most of Europe, parts of Asia, China, and India. I'm not sure what the specs are for Latin America or Africa though.

It is also true that real incomes for the lowest quintile in soceity have decreased by a significant amount in real terms over the past 30 years, but their consumption has only improved. Arnold attributes this to second or third earners for a household (low wage / high consumption), but I've also seen people argue that transfer payments (government benefits) have made up the gap.

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